Property Tax & Rental Calculators

Property Taxes and Rental Income Basics

Property taxes are one of the largest ongoing costs of homeownership. The national average is about $3,500 per year, but the actual amount depends entirely on where you live. Homeowners in states like New Jersey or Illinois can pay over $10,000 annually on a median-priced home, while those in Hawaii or Alabama may pay under $1,000. Your tax bill is determined by your local government's assessed value of the property multiplied by the mill rate, and both figures can change year to year.

For real estate investors, rental yield and cap rate are the two metrics that matter most when comparing properties. Cap rate — net operating income divided by purchase price — gives you a quick snapshot of potential return before financing. A duplex purchased for $400,000 renting both units at $1,500/month generates $36,000 per year in gross income. After property taxes, insurance, maintenance, and vacancy reserves, a realistic net yield is 5-7%. Before committing to an investment property, use our home affordability calculators to confirm the purchase fits your overall financial picture.

Whether you own a single-family home or a rental portfolio, property taxes and insurance directly reduce your cash flow and net returns. Even a 0.5% difference in your local tax rate changes your annual cost by $1,750 on a $350,000 property. Pairing tax estimates with accurate insurance quotes gives you the true cost of ownership — explore our insurance and payment analysis calculators to build the complete picture.