.rpc-calculator-container {
max-width: 800px;
margin: 0 auto;
padding: 20px;
font-family: -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif;
background: #f9f9f9;
border: 1px solid #e0e0e0;
border-radius: 8px;
}
.rpc-header {
text-align: center;
margin-bottom: 25px;
}
.rpc-grid {
display: grid;
grid-template-columns: 1fr 1fr;
gap: 20px;
}
@media (max-width: 600px) {
.rpc-grid {
grid-template-columns: 1fr;
}
}
.rpc-input-group {
margin-bottom: 15px;
}
.rpc-input-group label {
display: block;
margin-bottom: 5px;
font-weight: 600;
color: #333;
}
.rpc-input-group input, .rpc-input-group select {
width: 100%;
padding: 10px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 16px;
box-sizing: border-box;
}
.rpc-btn {
width: 100%;
padding: 15px;
background-color: #2c3e50;
color: white;
border: none;
border-radius: 4px;
font-size: 18px;
cursor: pointer;
margin-top: 10px;
transition: background-color 0.3s;
}
.rpc-btn:hover {
background-color: #34495e;
}
.rpc-results {
margin-top: 30px;
padding: 20px;
background: #ffffff;
border: 1px solid #ddd;
border-radius: 4px;
display: none;
}
.rpc-result-row {
display: flex;
justify-content: space-between;
padding: 10px 0;
border-bottom: 1px solid #eee;
}
.rpc-result-row:last-child {
border-bottom: none;
}
.rpc-result-label {
font-weight: 500;
color: #555;
}
.rpc-result-value {
font-weight: 700;
color: #2c3e50;
}
.rpc-highlight {
color: #27ae60;
}
.rpc-negative {
color: #c0392b;
}
.rpc-content {
margin-top: 40px;
line-height: 1.6;
color: #333;
}
.rpc-content h2 {
color: #2c3e50;
margin-top: 30px;
}
.rpc-content p {
margin-bottom: 15px;
}
.rpc-content ul {
margin-bottom: 15px;
padding-left: 20px;
}
.rpc-content li {
margin-bottom: 8px;
}
How to Calculate Rental Property ROI
Investing in rental real estate is one of the most popular ways to build wealth. However, simply buying a property and renting it out does not guarantee a profit. To ensure a sound investment, you must analyze the property's potential Return on Investment (ROI) using specific metrics like Cash Flow, Cap Rate, and Cash on Cash Return.
Key Metrics Explained
- Cash Flow: This is the net amount of money moving in or out of the investment each month. It is calculated by subtracting the total expenses (including the mortgage) from the rental income. A positive cash flow indicates the property is generating income, while negative cash flow means you are losing money monthly.
- Net Operating Income (NOI): NOI is a calculation used to analyze the profitability of income-generating real estate investments. It equals all revenue from the property, minus all necessary operating expenses (excluding mortgage payments).
- Cap Rate (Capitalization Rate): This metric indicates the rate of return that is expected to be generated on a real estate investment property. It is calculated by dividing the NOI by the property asset value (Current Market Value or Purchase Price). It helps compare properties regardless of financing.
- Cash on Cash Return: This measures the annual return the investor made on the property in relation to the amount of mortgage paid during the same year. It is calculated by dividing the annual pre-tax cash flow by the total cash invested (Down payment + Closing costs + Rehab costs).
Example Calculation
Let's say you purchase a property for $250,000. You put 20% down ($50,000) and pay $5,000 in closing costs. Your total cash invested is $55,000.
If your monthly rental income is $2,200 and your total monthly expenses (mortgage, taxes, insurance, vacancy reserve) are $1,800, your monthly cash flow is $400.
Annual Cash Flow = $400 × 12 = $4,800.
Cash on Cash Return = $4,800 / $55,000 = 8.72%.
Why Use a Rental Property Calculator?
Real estate deals often involve complex variables. A small change in interest rates, vacancy rates, or maintenance costs can turn a profitable deal into a liability. This calculator helps you stress-test your numbers before you make an offer, ensuring you account for vacancy loss, proper maintenance reserves, and debt service coverage.
function calculateRentalROI() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('rpcPrice').value);
var downPaymentPercent = parseFloat(document.getElementById('rpcDownPayment').value);
var closingCosts = parseFloat(document.getElementById('rpcClosingCosts').value);
var interestRate = parseFloat(document.getElementById('rpcInterestRate').value);
var loanTermYears = parseFloat(document.getElementById('rpcLoanTerm').value);
var rent = parseFloat(document.getElementById('rpcRent').value);
var vacancyPercent = parseFloat(document.getElementById('rpcVacancy').value);
var annualPropTax = parseFloat(document.getElementById('rpcPropTax').value);
var annualInsurance = parseFloat(document.getElementById('rpcInsurance').value);
var monthlyMaintenance = parseFloat(document.getElementById('rpcMaintenance').value);
// Validate Inputs
if (isNaN(price) || isNaN(rent) || isNaN(interestRate) || isNaN(downPaymentPercent)) {
alert("Please enter valid numbers for all fields.");
return;
}
// 2. Calculate Initial Investment
var downPaymentAmount = price * (downPaymentPercent / 100);
var loanAmount = price – downPaymentAmount;
var totalInitialInvestment = downPaymentAmount + closingCosts;
// 3. Calculate Mortgage Payment
// M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTermYears * 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);
}
// 4. Calculate Operating Expenses (Monthly)
var monthlyPropTax = annualPropTax / 12;
var monthlyInsurance = annualInsurance / 12;
var monthlyVacancyCost = rent * (vacancyPercent / 100);
var totalOperatingExpenses = monthlyPropTax + monthlyInsurance + monthlyMaintenance + monthlyVacancyCost; // Does not include mortgage
// 5. Calculate Metrics
var netOperatingIncomeMonthly = rent – totalOperatingExpenses;
var netOperatingIncomeAnnual = netOperatingIncomeMonthly * 12;
var monthlyCashFlow = netOperatingIncomeMonthly – monthlyMortgage;
var annualCashFlow = monthlyCashFlow * 12;
var capRate = (netOperatingIncomeAnnual / price) * 100;
var cashOnCash = (annualCashFlow / totalInitialInvestment) * 100;
// 6. Display Results
var resultSection = document.getElementById('rpcResultSection');
resultSection.style.display = 'block';
document.getElementById('resInitialInvestment').innerHTML = formatCurrency(totalInitialInvestment);
document.getElementById('resMortgage').innerHTML = formatCurrency(monthlyMortgage);
// NOI
var noiEl = document.getElementById('resNOI');
noiEl.innerHTML = formatCurrency(netOperatingIncomeMonthly);
// Cash Flow formatting
var cashFlowEl = document.getElementById('resCashFlow');
cashFlowEl.innerHTML = formatCurrency(monthlyCashFlow);
if(monthlyCashFlow >= 0) {
cashFlowEl.className = "rpc-result-value rpc-highlight";
} else {
cashFlowEl.className = "rpc-result-value rpc-negative";
}
// Cap Rate
document.getElementById('resCapRate').innerHTML = capRate.toFixed(2) + "%";
// CoC Return formatting
var cocEl = document.getElementById('resCoC');
cocEl.innerHTML = cashOnCash.toFixed(2) + "%";
if(cashOnCash >= 0) {
cocEl.className = "rpc-result-value rpc-highlight";
} else {
cocEl.className = "rpc-result-value rpc-negative";
}
}
function formatCurrency(num) {
return "$" + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}