function calculateRentalROI() {
// 1. Get Input Values
var price = parseFloat(document.getElementById("purchasePrice").value);
var closing = parseFloat(document.getElementById("closingCosts").value);
var downPct = parseFloat(document.getElementById("downPaymentPct").value);
var rate = parseFloat(document.getElementById("interestRate").value);
var years = parseFloat(document.getElementById("loanTerm").value);
var rent = parseFloat(document.getElementById("monthlyRent").value);
var vacancyPct = parseFloat(document.getElementById("vacancyRate").value);
var taxYear = parseFloat(document.getElementById("propertyTax").value);
var insYear = parseFloat(document.getElementById("insurance").value);
var hoaMo = parseFloat(document.getElementById("hoaFee").value);
var maintPct = parseFloat(document.getElementById("maintenancePct").value);
var mgmtPct = parseFloat(document.getElementById("managementFeePct").value);
// Validation
if (isNaN(price) || isNaN(rent) || isNaN(rate)) {
alert("Please enter valid numbers for Price, Rent, and Interest Rate.");
return;
}
// 2. Loan Calculations
var downPaymentAmt = price * (downPct / 100);
var loanAmount = price – downPaymentAmt;
var monthlyRate = (rate / 100) / 12;
var totalMonths = years * 12;
var monthlyMortgage = 0;
if (rate > 0) {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalMonths)) / (Math.pow(1 + monthlyRate, totalMonths) – 1);
} else {
monthlyMortgage = loanAmount / totalMonths;
}
// 3. Operating Income Calculation
var vacancyLoss = rent * (vacancyPct / 100);
var effectiveGrossIncome = rent – vacancyLoss;
// 4. Operating Expenses Calculation
var monthlyTax = taxYear / 12;
var monthlyIns = insYear / 12;
var maintCost = rent * (maintPct / 100);
var mgmtCost = rent * (mgmtPct / 100);
var totalOperatingExpenses = monthlyTax + monthlyIns + hoaMo + maintCost + mgmtCost;
// 5. Profit Metrics
var monthlyNOI = effectiveGrossIncome – totalOperatingExpenses;
var monthlyCashFlow = monthlyNOI – monthlyMortgage;
var annualCashFlow = monthlyCashFlow * 12;
var annualNOI = monthlyNOI * 12;
var totalCashInvested = downPaymentAmt + closing;
// Prevent division by zero
var cocReturn = 0;
if (totalCashInvested > 0) {
cocReturn = (annualCashFlow / totalCashInvested) * 100;
}
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
// 6. Display Results
var fmt = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
document.getElementById("resMortgage").innerText = fmt.format(monthlyMortgage);
document.getElementById("resOperatingExp").innerText = fmt.format(totalOperatingExpenses);
document.getElementById("resNOIMonthly").innerText = fmt.format(monthlyNOI);
var cashFlowEl = document.getElementById("resCashFlow");
cashFlowEl.innerText = fmt.format(monthlyCashFlow);
if(monthlyCashFlow < 0) {
cashFlowEl.classList.add("rp-error");
cashFlowEl.classList.remove("rp-highlight");
} else {
cashFlowEl.classList.remove("rp-error");
cashFlowEl.classList.add("rp-highlight");
}
document.getElementById("resTotalCash").innerText = fmt.format(totalCashInvested);
document.getElementById("resCoC").innerText = cocReturn.toFixed(2) + "%";
document.getElementById("resCapRate").innerText = capRate.toFixed(2) + "%";
document.getElementById("resultsArea").style.display = "block";
}
How to Analyze a Rental Property Investment
Investing in real estate is one of the most reliable ways to build wealth, but it requires precise calculations to ensure a property is a true asset rather than a liability. This Rental Property Cash Flow Calculator helps investors determine the profitability of a potential deal by analyzing income, expenses, and financing costs.
Key Metrics Explained
To make an informed decision, you must understand the three primary metrics generated by this calculator:
Cash Flow: This is the net amount of money left in your pocket every month after all expenses and mortgage payments are made. Positive cash flow is essential for long-term sustainability.
Cash on Cash Return (CoC): This measures the annual return on the actual cash you invested (down payment + closing costs). It allows you to compare real estate returns against other investment vehicles like stocks or bonds.
Cap Rate (Capitalization Rate): This metric evaluates the profitability of the property irrespective of financing. It is calculated by dividing the Net Operating Income (NOI) by the purchase price. It is useful for comparing properties as if they were bought with all cash.
Example Scenario
Let's look at a realistic example of how to use this tool:
Input
Value
Purchase Price
$250,000
Down Payment
20% ($50,000)
Monthly Rent
$2,200
Monthly Expenses (Tax, Ins, Maint, etc.)
$800 (approx)
Mortgage Payment (6.5% interest)
~$1,264
In this scenario, after paying the mortgage and all operating expenses, the investor might see a monthly cash flow of roughly $136. While positive, the investor must decide if this margin is wide enough to cover unexpected vacancies or major repairs.
Why You Must Calculate Reserves (Maintenance & Vacancy)
New investors often make the mistake of calculating cash flow based solely on Rent minus Mortgage. This is dangerous. You must account for:
Vacancy Rate: Properties will not be occupied 100% of the time. Allocating 5-8% helps buffer for turnover periods.
Maintenance & CapEx: Roofs leak and water heaters break. Setting aside 10-15% of the rent every month ensures you have the funds to handle these issues without dipping into your personal savings.
Use the calculator above to adjust these percentages and see how they impact your bottom line before you sign the purchase agreement.