Calculate your Cash Flow, Cap Rate, and Cash on Cash Return accurately.
Purchase Information
Loan Details
30 Years
15 Years
10 Years
Rental Income & Expenses
Investment Analysis
Monthly Cash Flow:$0.00
Cash on Cash ROI:0.00%
Cap Rate:0.00%
Monthly Mortgage Payment:$0.00
Total Cash Needed:$0.00
function calculateROI() {
// Get Inputs
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value) || 0;
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var closingCosts = parseFloat(document.getElementById('closingCosts').value) || 0;
var rehabCosts = parseFloat(document.getElementById('rehabCosts').value) || 0;
var interestRate = parseFloat(document.getElementById('interestRate').value) || 0;
var loanTerm = parseFloat(document.getElementById('loanTerm').value) || 30;
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var annualTaxes = parseFloat(document.getElementById('annualTaxes').value) || 0;
var annualInsurance = parseFloat(document.getElementById('annualInsurance').value) || 0;
var monthlyHOA = parseFloat(document.getElementById('monthlyHOA').value) || 0;
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value) || 0;
var maintenanceRate = parseFloat(document.getElementById('maintenanceRate').value) || 0;
// 1. Calculate Mortgage Payment
var loanAmount = purchasePrice – downPayment;
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
var monthlyMortgage = 0;
if (interestRate === 0) {
monthlyMortgage = loanAmount / numberOfPayments;
} else {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
// 2. Calculate Monthly Operating Expenses
var monthlyTaxes = annualTaxes / 12;
var monthlyInsurance = annualInsurance / 12;
var monthlyVacancy = monthlyRent * (vacancyRate / 100);
var monthlyMaintenance = monthlyRent * (maintenanceRate / 100);
var totalMonthlyExpenses = monthlyTaxes + monthlyInsurance + monthlyHOA + monthlyVacancy + monthlyMaintenance;
// 3. Calculate Cash Flow
var netOperatingIncomeMonthly = monthlyRent – totalMonthlyExpenses;
var monthlyCashFlow = netOperatingIncomeMonthly – monthlyMortgage;
var annualCashFlow = monthlyCashFlow * 12;
// 4. Calculate Net Operating Income (Annual) for Cap Rate
// Cap Rate = (NOI / Purchase Price) * 100
// NOI excludes mortgage payments
var annualNOI = netOperatingIncomeMonthly * 12;
var capRate = (annualNOI / purchasePrice) * 100;
// 5. Calculate Cash on Cash ROI
// CoC ROI = (Annual Pre-Tax Cash Flow / Total Cash Invested) * 100
var totalCashInvested = downPayment + closingCosts + rehabCosts;
var cashOnCashROI = 0;
if (totalCashInvested > 0) {
cashOnCashROI = (annualCashFlow / totalCashInvested) * 100;
}
// Update UI
var cashFlowEl = document.getElementById('resCashFlow');
var cocEl = document.getElementById('resCOC');
var capEl = document.getElementById('resCapRate');
var mortEl = document.getElementById('resMortgage');
var totalCashEl = document.getElementById('resTotalCash');
// Format Currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
cashFlowEl.innerHTML = formatter.format(monthlyCashFlow);
cashFlowEl.className = "rpc-result-value " + (monthlyCashFlow >= 0 ? "positive" : "negative");
cocEl.innerHTML = cashOnCashROI.toFixed(2) + "%";
cocEl.className = "rpc-result-value " + (cashOnCashROI >= 0 ? "positive" : "negative");
capEl.innerHTML = capRate.toFixed(2) + "%";
mortEl.innerHTML = formatter.format(monthlyMortgage);
totalCashEl.innerHTML = formatter.format(totalCashInvested);
// Show results
document.getElementById('results').style.display = 'block';
}
Understanding Your Rental Property ROI
Investing in rental real estate is one of the most powerful ways to build wealth, but simply buying a property doesn't guarantee a profit. To ensure an investment is sound, you must look beyond the monthly rent check and analyze the specific financial metrics that drive profitability. This calculator helps you evaluate the three most critical numbers for any landlord: Cash Flow, Cash on Cash Return, and Cap Rate.
1. Monthly Cash Flow
Cash flow is the net amount of money moving in or out of your business after all expenses are paid. In rental real estate, it is calculated as:
Positive cash flow ensures the property pays for itself and provides passive income. Negative cash flow implies you are losing money every month to hold the asset, usually hoping for appreciation.
2. Cash on Cash Return (CoC ROI)
This is arguably the most important metric for investors using leverage (mortgages). It measures the annual return on the actual cash you invested, not the total price of the home.
Formula: (Annual Pre-Tax Cash Flow / Total Cash Invested) x 100
For example, if you invest $50,000 (down payment + closing costs) and the property generates $5,000 in net profit per year, your Cash on Cash ROI is 10%. This allows you to compare real estate returns against stocks or bonds.
3. Capitalization Rate (Cap Rate)
The Cap Rate measures the natural rate of return of the property assuming it was bought with cash (no mortgage). It helps compare the profitability of two different properties regardless of how they are financed.
Formula: (Net Operating Income / Purchase Price) x 100
A higher Cap Rate generally indicates higher risk or higher potential return, while a lower Cap Rate is common in safer, high-demand areas.
Why Include Vacancy and Maintenance?
New investors often make the mistake of calculating profit as simply "Rent minus Mortgage." However, real life expenses are inevitable:
Vacancy Rate: You will not have a tenant 100% of the time. Setting aside 5-8% of rent helps cover months when the unit is empty.
Maintenance: Water heaters break and roofs leak. Budgeting 5-10% ensures you have the funds ready when repairs are needed.
Frequently Asked Questions
What is a "Good" ROI for a rental property?
While it varies by market, many investors aim for a Cash on Cash return of 8-12%. In highly appreciative markets, investors might accept lower cash flow (4-5%) in exchange for long-term equity growth.
Should I include appreciation in this calculation?
No. This calculator focuses on cash flow. Appreciation is speculative and should be treated as "icing on the cake" rather than the primary reason for investing.