Most ADU projections quote rent minus the loan payment. This calculator shows that number and the one that matters — cash flow after vacancy, taxes, insurance and reserves — along with the 1% rule, DSCR and the equity you create when the unit is finished. It starts set up the way most owners build: no cash in, on a HELOC against existing equity.
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$930/month of rent over the loan payment — about $540/month after every expense.
Rent-to-cost (1% rule)1.06%passes
Yield on cost10.5%
Cash-on-cashNo cash in
DSCR1.44
Equity at completion$28,000
Your cash in$0
Total project cost
$202,000
Net operating income (per year)
$21,120
Loan payment (per month)
$1,220
Cash flow once principal repayment starts
$382/mo
A simplified model for comparison — not financial, tax or lending advice. Interest-only payments rise when the draw period ends. Confirm rents with local comparables, costs with a fixed-price quote, and value with a lender and appraiser.
How this calculator works
Rent collected = monthly rent × 12, less vacancy.
Net operating income (NOI) = rent collected − added taxes and insurance − repairs and reserves − management.
Loan payment = interest only on the amount financed for a HELOC draw period, or principal and interest for a fixed loan.
Cash flow = NOI − loan payments. Cash-on-cash = cash flow ÷ the cash you put in.
Yield on cost = NOI ÷ total project cost. DSCR = NOI ÷ annual loan payments; many lenders look for roughly 1.2 or better.
Rent-to-cost = monthly rent ÷ total project cost — the 1% rule. Equity at completion = appraised value added − total cost.
A worked example
A $192,000 ADU with $10,000 of site costs, renting for $2,150, fully financed on an interest-only HELOC at 7.25%: rent clears the loan payment by about $930 a month, cash flow after every expense is about $540 a month, rent-to-cost is 1.06%, and the unit creates about $28,000 of equity at completion. Once principal repayment begins on a 30-year schedule, cash flow is about $380 a month.
What it doesn’t tell you
It doesn’t model rent growth, income taxes, depreciation or a future refinance.
Interest-only HELOC payments rise when the draw period ends, and variable rates can move. Test a higher rate.
Appraisals aren’t guaranteed. ADU comparables can be thin — ask a lender how they value ADUs locally.
The complete guide · $129
The Investor’s ADU Guide
Underwrite the deal honestly, then build a unit tenants choose and stay in — for no more than an ordinary one costs.
