How Do I Calculate Interest Rate on a Savings Account

Calculate Cash-on-Cash Return & Monthly Cash Flow

Purchase Details

Income & Expenses

Monthly Cash Flow $0.00

Cash-on-Cash ROI 0.00%

Cap Rate 0.00%

Monthly Mortgage (P&I):

Total Monthly Operating Expenses:

Total Initial Investment:

function calculateRentalROI() { var val = parseFloat(document.getElementById('propertyValue').value) || 0; var downPct = parseFloat(document.getElementById('downPaymentPercent').value) || 0; var rate = parseFloat(document.getElementById('interestRate').value) || 0; var term = parseFloat(document.getElementById('loanTerm').value) || 0; var rent = parseFloat(document.getElementById('monthlyRent').value) || 0; var tax = parseFloat(document.getElementById('annualTax').value) || 0; var ins = parseFloat(document.getElementById('annualInsurance').value) || 0; var maint = parseFloat(document.getElementById('maintPercent').value) || 0; var vac = parseFloat(document.getElementById('vacancyPercent').value) || 0; var downPaymentAmt = val * (downPct / 100); var loanAmt = val – downPaymentAmt; // Mortgage Calculation var monthlyRate = (rate / 100) / 12; var numPayments = term * 12; var monthlyMortgage = 0; if (rate > 0) { monthlyMortgage = (loanAmt * monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1); } else { monthlyMortgage = loanAmt / numPayments; } // Expenses var monthlyTax = tax / 12; var monthlyIns = ins / 12; var monthlyMaint = rent * (maint / 100); var monthlyVac = rent * (vac / 100); var totalOperatingExp = monthlyTax + monthlyIns + monthlyMaint + monthlyVac; // Totals var cashFlow = rent – monthlyMortgage – totalOperatingExp; var annualCashFlow = cashFlow * 12; var cocROI = (annualCashFlow / downPaymentAmt) * 100; // Cap Rate (NOI / Purchase Price) var netOperatingIncome = (rent – totalOperatingExp) * 12; var capRate = (netOperatingIncome / val) * 100; // Update DOM document.getElementById('resCashFlow').innerText = "$" + cashFlow.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resROI').innerText = cocROI.toFixed(2) + "%"; document.getElementById('resCapRate').innerText = capRate.toFixed(2) + "%"; document.getElementById('resMortgage').innerText = "$" + monthlyMortgage.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resExpenses').innerText = "$" + totalOperatingExp.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resInvestment').innerText = "$" + downPaymentAmt.toLocaleString(); document.getElementById('resultsArea').style.display = 'block'; }

Understanding Your Rental Property ROI

Investing in real estate requires a clear understanding of the numbers. A "good deal" isn't just about the property's look; it's about the math. This calculator helps you determine if a rental property is a sound investment by analyzing three key metrics: Cash-on-Cash Return, Cash Flow, and Cap Rate.

1. Cash-on-Cash Return (CoC)

This is arguably the most important metric for investors using financing. It measures the annual cash return on the actual cash you invested (your down payment). For example, if you put $60,000 down and your net cash flow for the year is $6,000, your Cash-on-Cash ROI is 10%.

2. Capitalization Rate (Cap Rate)

Cap Rate shows the property's yield regardless of how it is financed. It is calculated by taking the Net Operating Income (NOI) and dividing it by the purchase price. This allows you to compare different properties on an apples-to-apples basis without the "noise" of specific loan terms.

3. The Importance of Vacancy and Maintenance

New investors often forget to account for the "hidden" costs of landlording. A property is rarely occupied 100% of the time, and repairs are inevitable.

• Vacancy (5-8%): Budgeting for one month of vacancy per year is a safe industry standard.
• Maintenance (5-10%): Older properties may require a higher percentage of rent to be set aside for roof repairs, plumbing, or HVAC issues.

Investment Example

Scenario: You buy a duplex for $300,000 with a 20% down payment ($60,000). Total monthly rent is $2,200. After paying the mortgage, taxes, insurance, and setting aside 10% for vacancy/maintenance, your monthly cash flow is $350.

Annual Cash Flow: $4,200 ($350 x 12).
Cash-on-Cash ROI: 7.0% ($4,200 / $60,000).

How to Use This Calculator

1. Enter the Purchase Price: This is the total negotiated price of the property.
2. Adjust Down Payment: Most investment loans require 20-25% down.
3. Interest Rate: Use current market rates for investment properties (usually 0.5% to 1% higher than primary residences).
4. Operating Expenses: Be realistic. If the seller says maintenance is $0, don't believe it. Use at least 5% for your projections.
5. Hit Calculate: Analyze the results. In many markets, a Cash-on-Cash ROI of 8-12% is considered a strong investment.