Rental Property Cash Flow Calculator
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Analysis Results
Monthly Mortgage P&I:
$0.00
Total Monthly Costs:
$0.00
Net Monthly Cash Flow:
$0.00
Annual Cash Flow:
$0.00
Cash Invested (Down Payment):
$0.00
Cash on Cash Return:
0.00%
Understanding Rental Property Cash Flow Analysis
Investing in real estate is one of the most powerful ways to build long-term wealth, but not every property is a good deal. The difference between a profitable investment and a financial burden often comes down to one metric: Cash Flow. Our Rental Property Cash Flow Calculator helps investors analyze the potential returns of a property before signing on the dotted line.
How This Calculator Works
This tool takes the guesswork out of real estate analysis by accounting for the primary factors that influence your bottom line. It calculates your mortgage payment based on current interest rates and subtracts all associated costs from your rental income to determine your net profit.
Key Metrics Defined:
- Monthly Cash Flow: This is the profit you pocket every month after paying the mortgage, taxes, insurance, and maintenance costs. A positive number means the property pays you; a negative number means you are paying to hold the property.
- Cash on Cash Return (CoC): This is arguably the most important metric for rental investors. It measures the annual return on the actual cash you invested (your down payment and closing costs), rather than the total price of the property. It allows you to compare real estate returns against other investments like stocks or bonds.
Why "Cash Flow is King"
While property appreciation (the increase in property value over time) is a nice bonus, seasoned investors focus on cash flow. Cash flow provides a safety buffer against market downturns. If housing prices drop, but your tenant is still paying enough rent to cover your mortgage and expenses, you can hold onto the asset without financial stress until the market recovers.
Estimating Expenses Correctly
One of the most common mistakes new investors make is underestimating expenses. When using the "Total Monthly Expenses" field in the calculator above, ensure you include:
- Property Taxes: Usually around 1-2% of the property value annually, divided by 12.
- Insurance: Landlord policies are often slightly more expensive than standard homeowner policies.
- Maintenance & CapEx: Set aside 5-10% of rent for repairs (leaky faucets) and capital expenditures (new roof, HVAC).
- Vacancy Rate: Assume the property will sit empty for at least one month per year (approx 8% of rent).
- Property Management: If you aren't managing it yourself, expect to pay 8-10% of the monthly rent to a manager.
What is a Good Return?
While target returns vary by market and strategy, many investors aim for a Cash on Cash return of 8-12%. In highly appreciative markets, investors might accept lower cash flow (4-6%) betting on future value increases. Conversely, in stable, lower-cost markets, investors often demand higher immediate cash flow (12%+) to offset slower appreciation.
function calculateRental() {
// 1. Get Inputs
var price = parseFloat(document.getElementById('purchasePrice').value);
var downPercent = parseFloat(document.getElementById('downPaymentPercent').value);
var rate = parseFloat(document.getElementById('interestRate').value);
var years = parseFloat(document.getElementById('loanTerm').value);
var rent = parseFloat(document.getElementById('monthlyRent').value);
var expenses = parseFloat(document.getElementById('monthlyExpenses').value);
// Validation to prevent NaN errors
if (isNaN(price) || isNaN(downPercent) || isNaN(rate) || isNaN(years) || isNaN(rent) || isNaN(expenses)) {
alert("Please enter valid numbers in all fields.");
return;
}
// 2. Calculate Loan Details
var downPaymentAmount = price * (downPercent / 100);
var loanAmount = price – downPaymentAmount;
// Monthly Interest Rate
var monthlyRate = (rate / 100) / 12;
var numberOfPayments = years * 12;
// Mortgage Calculation (Principal + Interest)
// Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var mortgagePayment = 0;
if (rate === 0) {
mortgagePayment = loanAmount / numberOfPayments;
} else {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
// 3. Calculate Totals
var totalMonthlyCost = mortgagePayment + expenses;
var monthlyCashFlow = rent – totalMonthlyCost;
var annualCashFlow = monthlyCashFlow * 12;
// Cash on Cash Return = (Annual Pre-Tax Cash Flow / Total Cash Invested) * 100
// Note: For simplicity, we are assuming Cash Invested is just the Down Payment.
// In a real scenario, this would include closing costs and rehab costs.
var cocReturn = 0;
if (downPaymentAmount > 0) {
cocReturn = (annualCashFlow / downPaymentAmount) * 100;
}
// 4. Update UI
// Format Currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
document.getElementById('resMortgage').innerHTML = formatter.format(mortgagePayment);
document.getElementById('resTotalCosts').innerHTML = formatter.format(totalMonthlyCost);
var flowElement = document.getElementById('resMonthlyFlow');
flowElement.innerHTML = formatter.format(monthlyCashFlow);
// Color coding for positive/negative flow
if (monthlyCashFlow >= 0) {
flowElement.className = "result-value positive";
} else {
flowElement.className = "result-value negative";
}
document.getElementById('resAnnualFlow').innerHTML = formatter.format(annualCashFlow);
document.getElementById('resCashInvested').innerHTML = formatter.format(downPaymentAmount);
var cocElement = document.getElementById('resCoC');
cocElement.innerHTML = cocReturn.toFixed(2) + "%";
if (cocReturn >= 0) {
cocElement.className = "result-value positive";
} else {
cocElement.className = "result-value negative";
}
}
// Run calculation once on load to show initial valid state
window.onload = function() {
calculateRental();
};