Rental Property Cash Flow Calculator
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Rental Property Cash Flow Calculator
Monthly Mortgage Payment (P&I):
–
Total Monthly Expenses:
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Monthly Cash Flow:
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Annual Cash Flow:
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Cash-on-Cash Return:
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Understanding Rental Property Cash Flow
Investing in real estate is one of the most reliable ways to build wealth, but simply buying a property doesn't guarantee a profit. To succeed, investors must calculate the Cash Flow of a rental property before signing any contracts. This Rental Property Cash Flow Calculator helps you determine if a potential deal will put money in your pocket every month or become a financial drain.
What is Cash Flow?
Cash flow is the net amount of money moving into and out of your rental business. In real estate, it is calculated as:
Cash Flow = Total Rental Income – Total Expenses
Positive cash flow means the property generates more income than it costs to own and operate. Negative cash flow implies you are losing money every month to keep the property.
Key Metrics in this Calculator
- Monthly Mortgage Payment (P&I): The principal and interest paid to the lender. This is usually your largest expense.
- Operating Expenses: These include property taxes, landlord insurance, HOA fees, property management fees, and a budget for repairs and vacancy. Don't underestimate these!
- Cash-on-Cash Return: This is a crucial ROI metric. It measures the annual cash flow relative to the actual cash you invested (Down Payment). A generic rule of thumb for many investors is to aim for an 8-12% Cash-on-Cash return.
How to Improve Your Rental Returns
If the calculator shows negative cash flow or a low return, consider these adjustments:
- Negotiate the Price: Lowering the purchase price reduces your loan amount and mortgage payment.
- Increase the Down Payment: Putting more money down reduces monthly debt service, instantly improving cash flow (though it may lower your Cash-on-Cash percentage initially).
- Raise the Rent: Ensure you are charging market rates. Small increases can significantly boost your bottom line.
- Reduce Expenses: Shop around for cheaper insurance or manage the property yourself to save on management fees.
Use this tool to analyze multiple scenarios and ensure your next investment property is a profitable asset, not a liability.
function calculateCashFlow() {
// Get input values
var price = parseFloat(document.getElementById('purchasePrice').value);
var down = parseFloat(document.getElementById('downPayment').value);
var rate = parseFloat(document.getElementById('interestRate').value);
var years = parseFloat(document.getElementById('loanTerm').value);
var rent = parseFloat(document.getElementById('rentalIncome').value);
var expenses = parseFloat(document.getElementById('operatingExpenses').value);
// Validation
var errorDiv = document.getElementById('errorMessage');
var resultsDiv = document.getElementById('results');
if (isNaN(price) || isNaN(down) || isNaN(rate) || isNaN(years) || isNaN(rent) || isNaN(expenses) || years 0) {
cashOnCash = (annualCashFlow / down) * 100;
} else {
// Infinite return if no money down, handle gracefully
cashOnCash = 0;
}
// Display Results
document.getElementById('mortgagePaymentResult').innerText = '$' + mortgagePayment.toFixed(2);
document.getElementById('totalExpensesResult').innerText = '$' + totalMonthlyExpenses.toFixed(2);
var monthlyFlowEl = document.getElementById('monthlyCashFlowResult');
monthlyFlowEl.innerText = '$' + monthlyCashFlow.toFixed(2);
monthlyFlowEl.style.color = monthlyCashFlow >= 0 ? '#16a085' : '#c0392b';
var annualFlowEl = document.getElementById('annualCashFlowResult');
annualFlowEl.innerText = '$' + annualCashFlow.toFixed(2);
annualFlowEl.style.color = annualCashFlow >= 0 ? '#16a085' : '#c0392b';
var cocEl = document.getElementById('cashOnCashResult');
cocEl.innerText = cashOnCash.toFixed(2) + '%';
cocEl.style.color = cashOnCash >= 0 ? '#16a085' : '#c0392b';
resultsDiv.style.display = 'block';
}