Rental Property Cash Flow & ROI Calculator
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Investment Analysis
Monthly Cash Flow
$0.00
Cash on Cash Return (ROI)
0.00%
Cap Rate
0.00%
Net Operating Income (NOI) / Mo
$0.00
Total Monthly Expenses
$0.00
Mortgage Payment (P&I)
$0.00
Total Cash Needed to Close
$0.00
function calculateRentalROI() {
// Get Input Values
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value) || 0;
var closingCosts = parseFloat(document.getElementById('closingCosts').value) || 0;
var downPaymentPercent = parseFloat(document.getElementById('downPaymentPercent').value) || 0;
var interestRate = parseFloat(document.getElementById('interestRate').value) || 0;
var loanTerm = parseFloat(document.getElementById('loanTerm').value) || 0;
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value) || 0;
var propertyTax = parseFloat(document.getElementById('propertyTax').value) || 0;
var insurance = parseFloat(document.getElementById('insurance').value) || 0;
var hoaFees = parseFloat(document.getElementById('hoaFees').value) || 0;
var maintenance = parseFloat(document.getElementById('maintenance').value) || 0;
var managementFeePercent = parseFloat(document.getElementById('managementFee').value) || 0;
// Calculations – Upfront Costs
var downPaymentAmount = purchasePrice * (downPaymentPercent / 100);
var totalCashNeeded = downPaymentAmount + closingCosts;
var loanAmount = purchasePrice – downPaymentAmount;
// Calculations – Mortgage (P&I)
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
var mortgagePayment = 0;
if (interestRate > 0) {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
} else {
mortgagePayment = loanAmount / numberOfPayments;
}
// Calculations – Income
var vacancyLoss = monthlyRent * (vacancyRate / 100);
var effectiveGrossIncome = monthlyRent – vacancyLoss;
// Calculations – Expenses
var managementFeeAmount = monthlyRent * (managementFeePercent / 100);
var totalOperatingExpenses = propertyTax + insurance + hoaFees + maintenance + managementFeeAmount;
var totalExpensesWithMortgage = totalOperatingExpenses + mortgagePayment;
// Calculations – Metrics
var netOperatingIncome = effectiveGrossIncome – totalOperatingExpenses; // Monthly NOI
var monthlyCashFlow = netOperatingIncome – mortgagePayment;
var annualCashFlow = monthlyCashFlow * 12;
var annualNOI = netOperatingIncome * 12;
var cashOnCashReturn = 0;
if (totalCashNeeded > 0) {
cashOnCashReturn = (annualCashFlow / totalCashNeeded) * 100;
}
var capRate = 0;
if (purchasePrice > 0) {
capRate = (annualNOI / purchasePrice) * 100;
}
// Update UI
document.getElementById('resCashFlow').innerText = "$" + monthlyCashFlow.toFixed(2);
document.getElementById('resCocReturn').innerText = cashOnCashReturn.toFixed(2) + "%";
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + "%";
document.getElementById('resNOI').innerText = "$" + netOperatingIncome.toFixed(2);
document.getElementById('resTotalExp').innerText = "$" + totalExpensesWithMortgage.toFixed(2);
document.getElementById('resMortgage').innerText = "$" + mortgagePayment.toFixed(2);
document.getElementById('resCashNeeded').innerText = "$" + totalCashNeeded.toFixed(2);
// Color coding for cash flow
var cashFlowElement = document.getElementById('resCashFlow');
if (monthlyCashFlow >= 0) {
cashFlowElement.style.color = "green";
} else {
cashFlowElement.style.color = "red";
}
// Show Results
document.getElementById('results').style.display = 'block';
}
Understanding Rental Property Cash Flow
Investing in rental real estate is one of the most reliable ways to build long-term wealth. However, the success of an investment property hinges on the numbers. This Rental Property Cash Flow Calculator is designed to help investors determine the viability of a deal by analyzing the key metrics that matter: Cash Flow, Cash on Cash Return (ROI), and Cap Rate.
What is Cash Flow?
Cash flow is the net amount of money moving in and out of a business. In real estate, positive cash flow means that after paying all expenses—including the mortgage, taxes, insurance, and maintenance—you still have money left over at the end of the month. Positive cash flow is essential for a sustainable investment portfolio, as it provides a buffer against vacancies and unexpected repairs.
Our calculator determines your monthly cash flow using the formula:
Cash Flow = (Rent – Vacancy) – (Operating Expenses + Debt Service)
Cash on Cash Return vs. Cap Rate
Two common metrics used to evaluate rental properties are Cash on Cash Return and Capitalization Rate (Cap Rate), but they measure different things:
- Cash on Cash Return (CoC): This measures the return on the actual cash you invested (Down Payment + Closing Costs). It is arguably the most important metric for investors using leverage (mortgages). A CoC return of 8-12% is generally considered good in many markets.
- Cap Rate: This measures the property's natural rate of return assuming it was bought with all cash. It helps compare the profitability of different properties regardless of financing.
How to Estimate Expenses Accurately
Novice investors often underestimate expenses, leading to negative cash flow. When using this calculator, ensure you account for:
- Vacancy Rate: No property is occupied 100% of the time. Use 5-8% as a conservative estimate.
- CapEx & Repairs: Set aside 5-10% of rent for repairs and major capital expenditures (like a new roof or HVAC).
- Property Management: Even if you self-manage, it's wise to factor in 8-10% for management so the numbers still work if you decide to hire a professional later.
The 1% Rule
A quick rule of thumb for screening properties is the "1% Rule." It suggests that the monthly rent should be at least 1% of the purchase price. For example, a $200,000 home should rent for at least $2,000. While this rule is harder to find in today's market, it remains a useful benchmark for identifying cash-flowing assets.
Using This Calculator for Decision Making
Use the inputs above to test different scenarios. What happens if the interest rate rises? What if you put a larger down payment? By adjusting the "Loan Term" and "Interest Rate" fields, you can see how financing terms impact your monthly bottom line. Always aim for a property that cash flows positively using conservative estimates.