Pressure-test inputs
Run a base case and a conservative case. A decision that works only under perfect assumptions needs more diligence.
Free tax planning tool
Rental Property Deal Lab
Get the cap-rate answer first, then see financing, cash-on-cash return, depreciation, and a conservative gross tax-shield scenario.
No account required Educational, not individualized advice
Property economics
Financing and tax scenario
Cap rate
7.4%
$33,380 NOI ÷ $450,000 price
Cash-on-cash return
5.2%
$7,112 annual cash flow
Annual debt service
$26,268
$337,500 modeled loan
Gross first-year depreciation scenario
$88,200
$14,000 full-year straight-line baseline
Incremental gross tax-shield scenario
$23,744
$74,200 incremental depreciation × entered marginal rate, only if fully usable
The modeled gross tax shield is $28,224, but this is not cash savings or an after-tax return. Timing and loss-limit rules can defer or eliminate current-year use.
Review this deal before closingEducational estimate, updated August 23, 2026. Residential building basis is modeled over 27.5 years. The accelerated-basis scenario is intentionally illustrative and excludes placed-in-service timing, bonus-depreciation eligibility, passive-loss, at-risk, interest-allocation, recapture, and state rules. A real cost-segregation result requires property-level support.
How to use the result
Use the answer as a decision screen
The result is designed to expose the variables worth investigating, not to replace transaction documents, tax returns, or professional judgment.
Separate cash from tax
A tax benefit cannot rescue weak economics. Evaluate operating cash, financing, and tax effects separately.
Document before acting
Save the source documents and assumptions a CPA will need to validate the treatment.
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Frequently asked questions
These answers explain the model’s boundaries.
What expenses belong in cap rate?
Use recurring property-level operating expenses before mortgage principal and interest. Keep financing out of NOI so properties can be compared consistently.
Is the cost-segregation estimate a study?
No. The accelerated-basis percentage is a scenario input, not an engineering study or a depreciation schedule.
Does a higher cap rate make a good deal?
Not by itself. Vacancy, capital expenditures, tenant quality, financing, local risk, and the durability of rent all matter.