Calculate Cash on Cash Return, Cap Rate, and Monthly Cash Flow.
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Investment Analysis
Cash on Cash Return
0.00%
Monthly Cash Flow
$0.00
Cap Rate
0.00%
Total Cash Invested
$0.00
Estimated Mortgage Payment: $0.00 / month
function calculateROI() {
// 1. Get Input Values
var price = parseFloat(document.getElementById("purchasePrice").value) || 0;
var downPercent = parseFloat(document.getElementById("downPaymentPercent").value) || 0;
var closing = parseFloat(document.getElementById("closingCosts").value) || 0;
var rate = parseFloat(document.getElementById("interestRate").value) || 0;
var term = parseFloat(document.getElementById("loanTerm").value) || 0;
var rent = parseFloat(document.getElementById("monthlyRent").value) || 0;
var expenses = parseFloat(document.getElementById("monthlyExpenses").value) || 0;
var vacancy = parseFloat(document.getElementById("vacancyRate").value) || 0;
// 2. Perform Calculations
// Loan Calculation
var downPaymentAmount = price * (downPercent / 100);
var loanAmount = price – downPaymentAmount;
var monthlyRate = (rate / 100) / 12;
var numberOfPayments = term * 12;
var mortgagePayment = 0;
if (rate > 0 && term > 0) {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
// Cash Investment
var totalInvested = downPaymentAmount + closing;
// Income & Expenses
var vacancyLoss = rent * (vacancy / 100);
var effectiveGrossIncome = rent – vacancyLoss;
var totalMonthlyExpenses = expenses + mortgagePayment;
var monthlyCashFlow = effectiveGrossIncome – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// NOI (Net Operating Income) = Income – Operating Expenses (No Mortgage)
var annualNOI = (effectiveGrossIncome – expenses) * 12;
// ROI Metrics
var cocReturn = 0;
if (totalInvested > 0) {
cocReturn = (annualCashFlow / totalInvested) * 100;
}
var capRate = 0;
var totalCostBasis = price + closing; // Some calculate Cap Rate on Price, others on Total Cost. Using Cost Basis is safer for investors.
if (totalCostBasis > 0) {
capRate = (annualNOI / totalCostBasis) * 100;
}
// 3. Update DOM
document.getElementById("displayCoC").innerHTML = cocReturn.toFixed(2) + "%";
document.getElementById("displayCoC").className = "result-value " + (cocReturn < 0 ? "negative" : "");
document.getElementById("displayCashFlow").innerHTML = "$" + monthlyCashFlow.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("displayCashFlow").className = "result-value " + (monthlyCashFlow < 0 ? "negative" : "");
document.getElementById("displayCapRate").innerHTML = capRate.toFixed(2) + "%";
document.getElementById("displayTotalInvested").innerHTML = "$" + totalInvested.toLocaleString('en-US');
document.getElementById("displayMortgage").innerHTML = "$" + mortgagePayment.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Show results
document.getElementById("results").style.display = "block";
}
Understanding Rental Property ROI
Real estate investing relies heavily on mathematical precision. Simply "eyeballing" a property isn't enough to guarantee profitability. This Rental Property ROI Calculator helps investors analyze deals by looking at the two most critical metrics: Cash on Cash Return and Cap Rate.
What is Cash on Cash Return?
Cash on Cash (CoC) Return is arguably the most important metric for rental property investors who use financing. It measures the annual cash income earned on the property compared to the actual amount of cash you invested.
Formula: Cash on Cash Return = (Annual Pre-Tax Cash Flow / Total Cash Invested) × 100
Unlike standard ROI, which might look at the total deal value, CoC only cares about the liquidity you put into the deal (Down Payment + Closing Costs + Repairs). A "good" CoC return varies by market, but many investors aim for 8-12%.
Cap Rate vs. Cash on Cash Return
While this calculator provides both, it is essential to know the difference:
Cap Rate (Capitalization Rate): Measures the property's natural rate of return assuming you bought it in cash. It is calculated by dividing the Net Operating Income (NOI) by the Asset Value. It is great for comparing properties against one another regardless of financing.
Cash on Cash Return: Measures the return on your specific equity. It takes into account your mortgage (debt service). This tells you how hard your specific dollars are working for you.
Example Scenario
Imagine purchasing a property for $200,000. You put 20% down ($40,000) and pay $5,000 in closing costs. Your total cash invested is $45,000.
If, after paying the mortgage, taxes, and insurance, the property generates $300 per month in pure profit (cash flow), your annual cash flow is $3,600.
Your Cash on Cash return would be: ($3,600 / $45,000) = 8%. This means your money is compounding at 8% annually, not including appreciation or principal paydown.
How to Use This Calculator
Purchase Price & Costs: Enter the negotiated price and your estimated closing costs (usually 2-5% of price).
Financing: Input your interest rate and loan term to calculate the mortgage payment automatically.
Operating Data: Be realistic with expenses. Include Property Taxes, Insurance, HOA fees, and a budget for Maintenance/CapEx (Capital Expenditures).
Vacancy: Never assume 100% occupancy. A 5-8% vacancy rate is a standard conservative estimate.