function calculateRentalCashFlow() {
// 1. Get input values
var price = parseFloat(document.getElementById('purchasePrice').value);
var downPercent = parseFloat(document.getElementById('downPaymentPercent').value);
var rate = parseFloat(document.getElementById('interestRate').value);
var term = parseFloat(document.getElementById('loanTerm').value);
var rent = parseFloat(document.getElementById('monthlyRent').value);
var expenses = parseFloat(document.getElementById('monthlyExpenses').value);
// 2. Validate inputs
if (isNaN(price) || isNaN(downPercent) || isNaN(rate) || isNaN(term) || isNaN(rent) || isNaN(expenses)) {
alert("Please enter valid numbers in all fields.");
return;
}
// 3. Perform Calculations
// Calculate Loan Amount
var downPaymentAmount = price * (downPercent / 100);
var loanAmount = price – downPaymentAmount;
// Calculate Monthly Mortgage (Principal & Interest)
// Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var monthlyRate = (rate / 100) / 12;
var numberOfPayments = term * 12;
var mortgagePayment = 0;
if (rate === 0) {
mortgagePayment = loanAmount / numberOfPayments;
} else {
mortgagePayment = (loanAmount * monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
// Calculate Total Monthly Outflow
var totalMonthlyCost = mortgagePayment + expenses;
// Calculate Net Monthly Cash Flow
var monthlyCashFlow = rent – totalMonthlyCost;
// Calculate Annual Cash Flow
var annualCashFlow = monthlyCashFlow * 12;
// Calculate Cash-on-Cash ROI
// ROI = Annual Cash Flow / Total Cash Invested (Down Payment)
// Note: For simplicity, we are using Down Payment as total cash invested.
// Real world might include closing costs/rehab costs.
var roi = 0;
if (downPaymentAmount > 0) {
roi = (annualCashFlow / downPaymentAmount) * 100;
}
// 4. Update the HTML Output
document.getElementById('resultLoanAmount').innerText = "$" + loanAmount.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resultMortgage').innerText = "$" + mortgagePayment.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resultTotalCost').innerText = "$" + totalMonthlyCost.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
var cashFlowEl = document.getElementById('resultCashFlow');
cashFlowEl.innerText = "$" + monthlyCashFlow.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Style positive/negative cash flow
if (monthlyCashFlow >= 0) {
cashFlowEl.className = "result-value positive";
} else {
cashFlowEl.className = "result-value negative";
}
var roiEl = document.getElementById('resultROI');
roiEl.innerText = roi.toFixed(2) + "%";
if (roi >= 0) {
roiEl.className = "result-value positive";
} else {
roiEl.className = "result-value negative";
}
// Show results container
document.getElementById('resultsArea').style.display = "block";
}
Understanding Rental Property Cash Flow
Investing in real estate is one of the most reliable ways to build wealth, but the success of an investment property often boils down to one critical metric: Cash Flow. Our Rental Property Cash Flow Calculator is designed to help investors analyze potential deals quickly and accurately.
What is Rental Cash Flow?
Cash flow is the net amount of money moving into or out of your rental business after all expenses have been paid. Positive cash flow means the property generates more income than it costs to own and operate. Negative cash flow means you are losing money every month.
The formula is simple: Cash Flow = Total Income – Total Expenses
Inputs Explained
Purchase Price: The total agreed-upon price of the property.
Down Payment (%): The percentage of the price you pay upfront. A typical investment property loan requires 20-25%.
Interest Rate & Loan Term: These determine your monthly principal and interest (P&I) payments.
Monthly Rental Income: The amount you collect from tenants.
Monthly Expenses: This is where many investors make mistakes. Ensure you include property taxes, insurance, HOA fees, maintenance reserves (usually 5-10% of rent), vacancy reserves (5-10%), and property management fees if applicable.
Interpreting Your Results
Net Monthly Cash Flow: This is your profit. Most investors aim for at least $100-$300 per door in positive cash flow.
Cash-on-Cash ROI: This metric calculates the cash return on the actual cash you invested (your down payment). It is calculated as (Annual Cash Flow / Total Cash Invested) * 100. A Cash-on-Cash return of 8-12% is generally considered good in real estate investing, though this varies by market.
Why Cash Flow Matters
While property appreciation (increase in value over time) is a nice bonus, cash flow ensures your business survives daily operations. Properties with positive cash flow allow you to reinvest in repairs, handle vacancies without stress, and eventually scale your portfolio by purchasing more units.