Effective Interest Rate Formula Calculator

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Rental Property Cash Flow Calculator

Purchase Information

Income & Expenses (Monthly)

Analysis Results

Net Monthly Cash Flow: $0.00
Cash on Cash ROI: 0.00%
Cap Rate: 0.00%
Monthly Mortgage (P&I): $0.00
Total Monthly Expenses: $0.00
Net Operating Income (Monthly): $0.00
function calculateCashFlow() { // Get Inputs var price = parseFloat(document.getElementById('purchasePrice').value); var downPercent = parseFloat(document.getElementById('downPayment').value); var rate = parseFloat(document.getElementById('interestRate').value); var years = parseFloat(document.getElementById('loanTerm').value); var income = parseFloat(document.getElementById('rentIncome').value); var tax = parseFloat(document.getElementById('propertyTax').value); var ins = parseFloat(document.getElementById('insurance').value); var maint = parseFloat(document.getElementById('maintenance').value); var hoa = parseFloat(document.getElementById('hoaFees').value); var vacancyRate = parseFloat(document.getElementById('vacancy').value); // Validation if (isNaN(price) || isNaN(downPercent) || isNaN(rate) || isNaN(years) || isNaN(income)) { alert("Please enter valid numbers for all key fields."); return; } // Set defaults for optional fields if empty if (isNaN(tax)) tax = 0; if (isNaN(ins)) ins = 0; if (isNaN(maint)) maint = 0; if (isNaN(hoa)) hoa = 0; if (isNaN(vacancyRate)) vacancyRate = 0; // Mortgage Calculation var downPaymentAmount = price * (downPercent / 100); var loanAmount = price – downPaymentAmount; var monthlyRate = (rate / 100) / 12; var numPayments = years * 12; var mortgagePayment = 0; if (rate > 0) { mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1); } else { mortgagePayment = loanAmount / numPayments; } // Vacancy Loss var vacancyLoss = income * (vacancyRate / 100); var effectiveIncome = income – vacancyLoss; // Expenses var totalOperatingExpenses = tax + ins + maint + hoa; var totalExpensesWithMortgage = totalOperatingExpenses + mortgagePayment; // Key Metrics var monthlyCashFlow = effectiveIncome – totalExpensesWithMortgage; var annualCashFlow = monthlyCashFlow * 12; // NOI (Net Operating Income) = Income – Operating Expenses (excluding financing) var monthlyNOI = effectiveIncome – totalOperatingExpenses; var annualNOI = monthlyNOI * 12; // ROI (Cash on Cash) var initialInvestment = downPaymentAmount; // Simplified to just down payment var roi = 0; if (initialInvestment > 0) { roi = (annualCashFlow / initialInvestment) * 100; } // Cap Rate var capRate = 0; if (price > 0) { capRate = (annualNOI / price) * 100; } // Display Results document.getElementById('results').style.display = 'block'; var flowElem = document.getElementById('resCashFlow'); flowElem.innerText = "$" + monthlyCashFlow.toFixed(2); if (monthlyCashFlow >= 0) { flowElem.className = "result-value positive-flow"; } else { flowElem.className = "result-value negative-flow"; } document.getElementById('resROI').innerText = roi.toFixed(2) + "%"; document.getElementById('resCapRate').innerText = capRate.toFixed(2) + "%"; document.getElementById('resMortgage').innerText = "$" + mortgagePayment.toFixed(2); document.getElementById('resExpenses').innerText = "$" + totalExpensesWithMortgage.toFixed(2); document.getElementById('resNOI').innerText = "$" + monthlyNOI.toFixed(2); }

Understanding Rental Property Cash Flow

Investing in real estate is a powerful way to build wealth, but the success of a rental property largely depends on its math. A Rental Property Cash Flow Calculator is an essential tool for investors to evaluate whether a property will generate a profit (positive cash flow) or cost money to hold (negative cash flow).

What is Cash Flow?

Cash flow represents the net amount of cash moving into or out of an investment each month. In real estate terms, it is calculated as:

  • Gross Income (Rent) minus Vacancy Losses minus Total Expenses (Mortgage, Taxes, Insurance, HOA, Repairs).

Positive cash flow means the property pays for itself and provides you with passive income. Negative cash flow means you must contribute your own money every month to keep the property running.

Key Metrics Explained

When using this calculator, pay close attention to these three metrics:

1. Cash on Cash ROI

This metric measures the return on the actual cash you invested (Down Payment). A Cash on Cash ROI of 8-12% is generally considered good for a long-term rental, while short-term rentals often target 15% or higher.

2. Cap Rate (Capitalization Rate)

Cap Rate measures the rate of return on the property based on its Net Operating Income (NOI), assuming the property was bought in cash (no mortgage). This helps you compare the profitability of different properties regardless of how they are financed.

3. Net Operating Income (NOI)

This is your total income minus operating expenses, excluding mortgage payments. It is a raw indicator of the property's efficiency in generating revenue.

How to Improve Cash Flow

If your calculation shows negative cash flow, consider these adjustments:

  • Increase Rent: Are you charging market rates? Small increases can significantly impact the bottom line.
  • Lower Expenses: Shop for cheaper insurance or handle minor maintenance tasks yourself.
  • Larger Down Payment: Putting more money down reduces your monthly mortgage payment, instantly boosting cash flow (though it may lower your Cash on Cash ROI).

Use this calculator to run different scenarios before making an offer. Successful investors rarely buy on emotion; they buy based on the numbers.

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