Analyze your real estate investment deal instantly.
Investment Analysis
Monthly Mortgage Payment (P&I):$0.00
Net Operating Income (Annual):$0.00
Cap Rate:0.00%
Cash on Cash Return:0.00%
Estimated Monthly Cash Flow:$0.00
How to Calculate Rental Property Profitability
Investing in real estate is one of the most reliable ways to build wealth, but analyzing a deal correctly is critical before signing any papers. This Rental Property Cash Flow Calculator helps investors determine if a specific property will yield a positive return on investment (ROI).
Understanding the Key Metrics
Cash Flow: This is the net profit you pocket every month. It is calculated by taking your total income (rent) and subtracting all expenses, including the mortgage, taxes, insurance, and maintenance costs. Positive cash flow ensures the property pays for itself.
Net Operating Income (NOI): This measures the profitability of the property excluding financing costs. It is calculated as Gross Income – Operating Expenses. NOI is essential for calculating the Cap Rate.
Cap Rate (Capitalization Rate): A fundamental metric used to compare different real estate investments. It represents the rate of return on the property based on the income the property is expected to generate. Formula: (NOI / Purchase Price) × 100.
Cash on Cash Return: This metric tells you how hard your actual invested cash (down payment + closing costs) is working. It is often considered more important than Cap Rate for leveraged deals. Formula: (Annual Cash Flow / Total Cash Invested) × 100.
Realistic Example
Consider a property listed for $200,000. You put a 20% down payment ($40,000). The loan amount is $160,000 at a 6.5% interest rate over 30 years.
If the property rents for $2,000/month and your operating expenses (taxes, insurance, repairs) average $600/month, plus a 5% vacancy allowance ($100/month), your effective income is lower than the gross rent. After paying the mortgage (~$1,011), your monthly cash flow would be approximately $289. This results in a Cash on Cash return of roughly 8.6%.
function calculateROI() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('rp_price').value);
var down = parseFloat(document.getElementById('rp_down').value);
var rate = parseFloat(document.getElementById('rp_rate').value);
var term = parseFloat(document.getElementById('rp_term').value);
var rent = parseFloat(document.getElementById('rp_rent').value);
var expenses = parseFloat(document.getElementById('rp_expenses').value);
var vacancy = parseFloat(document.getElementById('rp_vacancy').value);
// 2. Validation
if (isNaN(price) || isNaN(down) || isNaN(rate) || isNaN(term) || isNaN(rent) || isNaN(expenses)) {
alert("Please enter valid numbers in all required fields.");
return;
}
// 3. Calculation Logic
// Mortgage Calculation
var principal = price – down;
var monthlyRate = (rate / 100) / 12;
var numberOfPayments = term * 12;
// Handle edge case of 0% interest
var monthlyMortgage = 0;
if (rate === 0) {
monthlyMortgage = principal / numberOfPayments;
} else {
monthlyMortgage = (principal * monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
// Income & Expense Calculation
var grossAnnualRent = rent * 12;
var vacancyLossAnnual = grossAnnualRent * (vacancy / 100);
var effectiveGrossIncome = grossAnnualRent – vacancyLossAnnual;
var operatingExpensesAnnual = expenses * 12;
var annualDebtService = monthlyMortgage * 12;
// Core Metrics
var netOperatingIncome = effectiveGrossIncome – operatingExpensesAnnual; // NOI
var annualCashFlow = netOperatingIncome – annualDebtService;
var monthlyCashFlow = annualCashFlow / 12;
// ROI Metrics
var capRate = (netOperatingIncome / price) * 100;
// Prevent division by zero if down payment is 0
var cashOnCash = 0;
if (down > 0) {
cashOnCash = (annualCashFlow / down) * 100;
}
// 4. Update UI
document.getElementById('res_mortgage').innerText = '$' + monthlyMortgage.toFixed(2);
document.getElementById('res_noi').innerText = '$' + netOperatingIncome.toFixed(2);
document.getElementById('res_cap').innerText = capRate.toFixed(2) + '%';
document.getElementById('res_coc').innerText = cashOnCash.toFixed(2) + '%';
var cashFlowEl = document.getElementById('res_cashflow');
cashFlowEl.innerText = '$' + monthlyCashFlow.toFixed(2);
// Style adjustments for negative cash flow
if (monthlyCashFlow < 0) {
cashFlowEl.classList.remove('rp-highlight');
cashFlowEl.classList.add('rp-highlight-neg');
} else {
cashFlowEl.classList.remove('rp-highlight-neg');
cashFlowEl.classList.add('rp-highlight');
}
// Show results
document.getElementById('rp_results_area').style.display = 'block';
}
{
"@context": "https://schema.org",
"@type": "FAQPage",
"mainEntity": [{
"@type": "Question",
"name": "How is Rental Cash Flow calculated?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Rental cash flow is calculated by subtracting total monthly expenses (mortgage, taxes, insurance, HOA, repairs, and vacancy allowance) from the total monthly rental income."
}
}, {
"@type": "Question",
"name": "What is a good Cap Rate?",
"acceptedAnswer": {
"@type": "Answer",
"text": "A 'good' Cap Rate varies by market and property type, but generally, investors look for a Cap Rate between 4% and 10%. Higher cap rates typically indicate higher risk or lower appreciation potential, while lower cap rates are common in stable, high-demand areas."
}
}, {
"@type": "Question",
"name": "Why is Cash on Cash Return important?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Cash on Cash Return measures the return on the actual cash you invested (down payment), rather than the total property value. It gives a more accurate picture of your investment efficiency when using leverage (a mortgage)."
}
}]
}