function calculateRentalCashFlow() {
// 1. Get Inputs
var price = parseFloat(document.getElementById("rc_price").value);
var downPercent = parseFloat(document.getElementById("rc_down").value);
var closingCosts = parseFloat(document.getElementById("rc_closing").value);
var rate = parseFloat(document.getElementById("rc_rate").value);
var term = parseFloat(document.getElementById("rc_term").value);
var rent = parseFloat(document.getElementById("rc_rent").value);
var taxYearly = parseFloat(document.getElementById("rc_tax").value);
var insuranceYearly = parseFloat(document.getElementById("rc_insurance").value);
var hoaMonthly = parseFloat(document.getElementById("rc_hoa").value);
var maintPercent = parseFloat(document.getElementById("rc_maintenance").value);
// Validation
if (isNaN(price) || isNaN(downPercent) || isNaN(rate) || isNaN(term) || isNaN(rent)) {
alert("Please fill in all required fields with valid numbers.");
return;
}
// 2. Calculations
// Loan Details
var downPayment = price * (downPercent / 100);
var loanAmount = price – downPayment;
var totalCashNeeded = downPayment + closingCosts;
// Mortgage Payment (P&I)
var monthlyRate = (rate / 100) / 12;
var numPayments = term * 12;
var monthlyMortgage = 0;
if (rate === 0) {
monthlyMortgage = loanAmount / numPayments;
} else {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
}
// Monthly Expenses (Operating)
var monthlyTax = taxYearly / 12;
var monthlyInsurance = insuranceYearly / 12;
var monthlyMaintVacancy = rent * (maintPercent / 100);
var totalOperatingExpenses = monthlyTax + monthlyInsurance + hoaMonthly + monthlyMaintVacancy;
// Total Expenses (Op + Mortgage)
var totalMonthlyExpenses = totalOperatingExpenses + monthlyMortgage;
// Cash Flow
var monthlyCashFlow = rent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// NOI (Net Operating Income) -> Income minus Operating Expenses (excluding mortgage)
var annualNOI = (rent * 12) – (totalOperatingExpenses * 12);
// Metrics
var capRate = (annualNOI / price) * 100;
var cashOnCash = (annualCashFlow / totalCashNeeded) * 100;
// 3. Display Results
document.getElementById("rc-results").style.display = "block";
document.getElementById("res_mortgage").innerText = "$" + monthlyMortgage.toFixed(2);
document.getElementById("res_expenses").innerText = "$" + totalMonthlyExpenses.toFixed(2);
var cfElement = document.getElementById("res_cashflow");
cfElement.innerText = "$" + monthlyCashFlow.toFixed(2);
if (monthlyCashFlow >= 0) {
cfElement.className = "rc-result-value rc-highlight";
} else {
cfElement.className = "rc-result-value rc-negative";
}
document.getElementById("res_noi").innerText = "$" + annualNOI.toFixed(2);
document.getElementById("res_cap").innerText = capRate.toFixed(2) + "%";
var cocElement = document.getElementById("res_coc");
cocElement.innerText = cashOnCash.toFixed(2) + "%";
if (cashOnCash >= 0) {
cocElement.className = "rc-result-value rc-highlight";
} else {
cocElement.className = "rc-result-value rc-negative";
}
document.getElementById("res_cash_needed").innerText = "$" + totalCashNeeded.toFixed(2);
}
Understanding Rental Property Cash Flow
Investing in real estate is one of the most reliable ways to build wealth, but simply buying a property and renting it out doesn't guarantee a profit. To be a successful investor, you must analyze the numbers rigorously. This Rental Property Cash Flow Calculator helps you determine the viability of an investment by calculating key metrics like Net Operating Income (NOI), Cap Rate, and Cash on Cash Return.
Key Metrics Explained
1. Monthly Cash Flow
This is the profit you take home every month after all bills are paid. It is calculated as: Total Income – (Mortgage + Taxes + Insurance + HOA + Repairs + Vacancy). Positive cash flow creates passive income, while negative cash flow means the property costs you money to hold.
2. Net Operating Income (NOI)
NOI is a critical metric for valuing income-producing property. It represents the profitability of the property itself, ignoring the financing structure (mortgage). Formula: Gross Operating Income – Operating Expenses.
3. Cap Rate (Capitalization Rate)
The Cap Rate measures the rate of return on the property assuming you paid all cash. It allows you to compare different properties regardless of how they are financed. A higher cap rate generally implies higher returns but also potentially higher risk.
4. Cash on Cash Return
This is perhaps the most important metric for leveraged investors. It measures the annual return on the actual cash you invested (Down Payment + Closing Costs). Formula: (Annual Cash Flow / Total Cash Invested) x 100. A Cash on Cash return of 8-12% is often considered a solid target for rental properties.
How to Estimate Expenses
Vacancy Rate: Always budget for vacancy. 5% to 10% is standard, depending on the local rental market demand.
Maintenance: Repairs are inevitable. Budgeting 1% of the property value per year, or 10% of rental income, is a prudent rule of thumb for maintenance reserves.
Property Management: If you hire a manager, expect to pay 8% to 12% of the monthly rent. Even if you self-manage, it is wise to factor this cost in to see if the deal works as a passive investment.
Why Use a Cash Flow Calculator?
Emotions can cloud judgment in real estate. A deal might look great because of the location or the aesthetic of the house, but the math might tell a different story. Using a dedicated calculator ensures you account for "hidden" costs like vacancy and maintenance, preventing you from buying a liability instead of an asset.