function calculateRentalCashFlow() {
// Get Inputs
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var otherIncome = parseFloat(document.getElementById('otherIncome').value) || 0;
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value) || 0;
var managementFee = parseFloat(document.getElementById('managementFee').value) || 0;
var repairsMaintenance = parseFloat(document.getElementById('repairsMaintenance').value) || 0;
var capex = parseFloat(document.getElementById('capex').value) || 0;
var mortgagePayment = parseFloat(document.getElementById('mortgagePayment').value) || 0;
var propertyTax = parseFloat(document.getElementById('propertyTax').value) || 0;
var insurance = parseFloat(document.getElementById('insurance').value) || 0;
var hoa = parseFloat(document.getElementById('hoa').value) || 0;
// Calculations
var grossPotentialIncome = monthlyRent + otherIncome;
// Calculate percentages based on Rent only usually, but some investors use Gross Potential. We use Rent.
var vacancyCost = monthlyRent * (vacancyRate / 100);
var managementCost = monthlyRent * (managementFee / 100);
var repairsCost = monthlyRent * (repairsMaintenance / 100);
var capexCost = monthlyRent * (capex / 100);
var effectiveGrossIncome = grossPotentialIncome – vacancyCost;
var totalOperatingExpenses = managementCost + repairsCost + capexCost + propertyTax + insurance + hoa;
var noi = effectiveGrossIncome – totalOperatingExpenses;
var totalExpensesIncludingDebt = totalOperatingExpenses + mortgagePayment;
var monthlyCashFlow = effectiveGrossIncome – totalExpensesIncludingDebt;
var annualCashFlow = monthlyCashFlow * 12;
// Display Formatting
function formatCurrency(num) {
return '$' + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}
document.getElementById('resGrossIncome').innerText = formatCurrency(effectiveGrossIncome);
document.getElementById('resTotalExpenses').innerText = formatCurrency(totalExpensesIncludingDebt);
document.getElementById('resNOI').innerText = formatCurrency(noi); // NOI usually excludes debt service
var cashFlowEl = document.getElementById('resCashFlow');
cashFlowEl.innerText = formatCurrency(monthlyCashFlow);
var annualEl = document.getElementById('resAnnualCashFlow');
annualEl.innerText = formatCurrency(annualCashFlow);
// Styling for positive/negative
if (monthlyCashFlow >= 0) {
cashFlowEl.className = "positive";
annualEl.className = "positive";
} else {
cashFlowEl.className = "negative";
annualEl.className = "negative";
}
// Show results
document.getElementById('results-area').style.display = "block";
}
Understanding Rental Property Cash Flow
Cash flow is the lifeblood of any real estate investment. Put simply, it is the money remaining after all bills and operating expenses have been paid. A positive cash flow indicates that the property is generating income for you, while a negative cash flow means you are paying out of pocket to hold the asset.
How to Calculate Cash Flow Correctly
Many novice investors make the mistake of only subtracting the mortgage from the rent to determine profit. This method is dangerous because it ignores the inevitable costs of owning real estate. A true cash flow analysis must include:
Vacancy: You will not have a tenant 100% of the time. Allocating 5-10% of rent for vacancy ensures you have reserves for turnover periods.
CapEx (Capital Expenditures): Roofs, HVAC systems, and water heaters eventually need replacement. Setting aside a percentage of rent monthly prevents "cash flow shock" when these big-ticket items break.
Repairs & Maintenance: Leaky faucets and broken windows are the landlord's responsibility. Budgeting 5-10% helps cover these ongoing costs.
Management Fees: Even if you self-manage, you should account for your time or the future cost of hiring a property manager (typically 8-10% of collected rent).
Net Operating Income (NOI) vs. Cash Flow
Our calculator displays both NOI and Cash Flow. Net Operating Income is your profitability before the mortgage is paid. It measures the potential of the asset itself. Cash Flow is what lands in your bank account after the debt service (mortgage) is paid. Lenders often look at NOI, while investors live on Cash Flow.
What is a "Good" Cash Flow?
The definition of good cash flow varies by market and strategy. However, a common rule of thumb for buy-and-hold residential investors is to aim for $100 to $200 per door, per month in pure profit after all expenses, including CapEx and repairs reserves. In high-appreciation markets, investors might accept lower cash flow, while in stagnant markets, higher cash flow is required to justify the risk.