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font-family: -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif;
line-height: 1.6;
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max-width: 1200px;
margin: 0 auto;
padding: 20px;
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.calc-container {
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border: 1px solid #e0e0e0;
border-radius: 8px;
padding: 30px;
margin-bottom: 40px;
box-shadow: 0 4px 6px rgba(0,0,0,0.05);
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.calc-grid {
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gap: 20px;
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.calc-grid {
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Mastering Rental Property Analysis
Investing in real estate is one of the most reliable ways to build long-term wealth, but success hinges on the numbers. Unlike purchasing a primary residence where emotion plays a large role, buying a rental property is purely a business transaction. To ensure profitability, investors must accurately calculate Cash Flow and Cash on Cash Return (CoC).
What is Cash Flow?
Cash flow is the net amount of cash moving into or out of your investment each month. It is calculated as Total Income – Total Expenses. Positive cash flow means the property pays for itself and provides profit; negative cash flow means you are losing money every month to hold the asset.
How to Use This Cash Flow Calculator
This calculator is designed to provide a comprehensive analysis of a potential rental property deal. Here is a breakdown of the specific inputs required:
1. Purchase Assumptions
Start with the Purchase Price and your financing strategy. The Down Payment is critical as it determines your leverage. A higher down payment reduces risk and increases cash flow, but reduces your overall Return on Investment (ROI) percentage. Don't forget Closing Costs (typically 2-5% of purchase price) and any immediate Rehab Costs needed to make the property rent-ready.
2. Loan Details
Enter your Interest Rate and Loan Term. Even a small difference in interest rates can significantly impact your monthly mortgage payment (Principal & Interest), which is often the largest expense in a rental portfolio.
3. Operational Expenses (The "Silent Killers")
Novice investors often calculate ROI based solely on Mortgage, Taxes, and Insurance (PITI). However, true cash flow analysis must account for:
- Vacancy Rate: Properties do not stay rented 365 days a year. A standard conservative estimate is 5-8% (approx. 1 month vacancy per year).
- Maintenance & CapEx: Toilets break, and roofs need replacing. Allocating 5-10% of gross rent for repairs ensures you have reserves when things go wrong.
- Property Management: Even if you plan to self-manage, it is wise to factor in a management fee (typically 8-10%) to ensure the deal works as a passive investment later.
Interpreting Your Results
Cash on Cash Return (CoC)
This is arguably the most important metric for rental investors. It answers the question: "For every dollar I put into this deal, what percentage do I get back annually?"
Formula: (Annual Pre-Tax Cash Flow / Total Cash Invested) × 100
A "good" CoC return varies by market, but many investors target 8-12%. This often outperforms the stock market while providing the added benefits of property appreciation and tax depreciation.
Cap Rate (Capitalization Rate)
Cap Rate 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. A higher Cap Rate generally indicates higher risk or higher potential return.
Why Calculate "Net Operating Income" (NOI)?
NOI is your total income minus operating expenses (excluding mortgage payments). Lenders look at NOI to determine if the property generates enough income to cover the debt. If your NOI covers your debt service by a ratio of 1.25 or higher (DSCR), lenders generally view the asset as healthy.
Use this calculator as a first screening tool. If the numbers don't work here with conservative estimates, it's safer to walk away than to speculate on future appreciation.
function calculateCashFlow() {
// 1. Get Inputs
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value) || 0;
var downPaymentPercent = parseFloat(document.getElementById('downPaymentPercent').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 loanTermYears = parseFloat(document.getElementById('loanTerm').value) || 0;
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var otherIncome = parseFloat(document.getElementById('otherIncome').value) || 0;
var annualTax = parseFloat(document.getElementById('propertyTax').value) || 0;
var annualInsurance = parseFloat(document.getElementById('insurance').value) || 0;
var monthlyHoa = parseFloat(document.getElementById('hoaFees').value) || 0;
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value) || 0;
var capexRate = parseFloat(document.getElementById('capexRate').value) || 0;
var propMgmtRate = parseFloat(document.getElementById('propMgmt').value) || 0;
// 2. Calculate Acquisition Data
var downPaymentAmount = purchasePrice * (downPaymentPercent / 100);
var loanAmount = purchasePrice – downPaymentAmount;
var totalInitialInvestment = downPaymentAmount + closingCosts + rehabCosts;
// 3. Calculate Mortgage (P&I)
// Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var monthlyRate = (interestRate / 100) / 12;
var totalPayments = loanTermYears * 12;
var monthlyMortgage = 0;
if (interestRate > 0 && loanTermYears > 0) {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
} else if (interestRate === 0 && loanTermYears > 0) {
monthlyMortgage = loanAmount / totalPayments;
}
// 4. Calculate Income
var totalMonthlyIncome = monthlyRent + otherIncome;
// 5. Calculate Expenses
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
var vacancyCost = totalMonthlyIncome * (vacancyRate / 100);
var capexCost = totalMonthlyIncome * (capexRate / 100);
var propMgmtCost = totalMonthlyIncome * (propMgmtRate / 100);
var operationalExpenses = monthlyTax + monthlyInsurance + monthlyHoa + vacancyCost + capexCost + propMgmtCost;
var totalExpenses = operationalExpenses + monthlyMortgage;
// 6. Calculate Metrics
var monthlyCashFlow = totalMonthlyIncome – totalExpenses;
var annualCashFlow = monthlyCashFlow * 12;
var noi = (totalMonthlyIncome – operationalExpenses) * 12; // Annual NOI
var cocReturn = 0;
if (totalInitialInvestment > 0) {
cocReturn = (annualCashFlow / totalInitialInvestment) * 100;
}
var capRate = 0;
if (purchasePrice > 0) {
capRate = (noi / purchasePrice) * 100;
}
// 7. Display Results
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
document.getElementById('res-initialInvest').innerText = formatter.format(totalInitialInvestment);
document.getElementById('res-mortgage').innerText = formatter.format(monthlyMortgage);
document.getElementById('res-totalExpenses').innerText = formatter.format(totalExpenses);
document.getElementById('res-noi').innerText = formatter.format(noi / 12); // Showing monthly NOI in the list
document.getElementById('res-cashflow').innerText = formatter.format(monthlyCashFlow);
document.getElementById('res-coc').innerText = cocReturn.toFixed(2) + "%";
document.getElementById('res-caprate').innerText = capRate.toFixed(2) + "%";
// Styling for positive/negative cash flow
var cfRow = document.getElementById('cashflow-row');
if (monthlyCashFlow >= 0) {
cfRow.style.color = "#27ae60";
} else {
cfRow.style.color = "#c0392b";
}
document.getElementById('results-area').style.display = 'block';
// Scroll to results
document.getElementById('results-area').scrollIntoView({ behavior: 'smooth' });
}