function calculateRentalCashFlow() {
// 1. Get Inputs
var price = parseFloat(document.getElementById('rpPrice').value);
var downPercent = parseFloat(document.getElementById('rpDownPercent').value);
var rate = parseFloat(document.getElementById('rpIntRate').value);
var term = parseFloat(document.getElementById('rpTerm').value);
var rent = parseFloat(document.getElementById('rpRent').value);
var annualTax = parseFloat(document.getElementById('rpTax').value);
var annualIns = parseFloat(document.getElementById('rpInsurance').value);
var monthlyMaint = parseFloat(document.getElementById('rpMaint').value);
// 2. Validation
if (isNaN(price) || isNaN(downPercent) || isNaN(rate) || isNaN(term) || isNaN(rent)) {
alert("Please fill in all required fields (Price, Down Payment, Rate, Term, Rent) with valid numbers.");
return;
}
// Handle optional expense fields if empty
if (isNaN(annualTax)) annualTax = 0;
if (isNaN(annualIns)) annualIns = 0;
if (isNaN(monthlyMaint)) monthlyMaint = 0;
// 3. Calculation Logic
var downPaymentAmount = price * (downPercent / 100);
var loanAmount = price – downPaymentAmount;
// Mortgage Payment (P&I)
// M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var monthlyRate = (rate / 100) / 12;
var totalPayments = term * 12;
var mortgagePayment = 0;
if (rate > 0) {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
} else {
mortgagePayment = loanAmount / totalPayments;
}
// Monthly Expenses
var monthlyTax = annualTax / 12;
var monthlyIns = annualIns / 12;
var totalMonthlyExpenses = monthlyTax + monthlyIns + monthlyMaint;
var totalMonthlyOutflow = mortgagePayment + totalMonthlyExpenses;
// Cash Flow
var cashFlow = rent – totalMonthlyOutflow;
// NOI (Net Operating Income) = Annual Rent – Annual Operating Expenses (Excluding Mortgage)
var annualNOI = (rent * 12) – (totalMonthlyExpenses * 12);
// Cap Rate = (NOI / Purchase Price) * 100
var capRate = (annualNOI / price) * 100;
// Cash on Cash ROI = (Annual Cash Flow / Total Cash Invested) * 100
// Assuming Total Cash Invested is just Down Payment for this simplified calc (ignoring closing costs)
var annualCashFlow = cashFlow * 12;
var cocROI = 0;
if (downPaymentAmount > 0) {
cocROI = (annualCashFlow / downPaymentAmount) * 100;
}
// 4. Update UI
var resultDiv = document.getElementById('rpResultContainer');
resultDiv.style.display = 'block';
// Format Currency Helper
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
document.getElementById('rpOutMortgage').innerText = formatter.format(mortgagePayment);
document.getElementById('rpOutExpenses').innerText = formatter.format(totalMonthlyExpenses);
var cfElement = document.getElementById('rpOutCashFlow');
cfElement.innerText = formatter.format(cashFlow);
// Color coding for cash flow
if (cashFlow >= 0) {
cfElement.className = "rp-result-value rp-highlight";
} else {
cfElement.className = "rp-result-value rp-negative";
}
document.getElementById('rpOutCOC').innerText = cocROI.toFixed(2) + "%";
document.getElementById('rpOutCap').innerText = capRate.toFixed(2) + "%";
document.getElementById('rpOutInvested').innerText = formatter.format(downPaymentAmount);
}
Understanding Rental Property Cash Flow
Investing in real estate is one of the most reliable ways to build wealth, but the success of an investment typically hinges on one critical metric: Cash Flow. This Rental Property Calculator is designed to help investors determine the viability of a potential purchase by analyzing income, expenses, and debt service.
What is Real Estate Cash Flow?
Cash flow is the profit left over after you have collected the rent and paid all operating expenses and mortgage payments.
Positive Cash Flow: Your property brings in more money than it costs to own. This is the goal for passive income investors.
Negative Cash Flow: The property costs you money every month. This is only sustainable if the property is appreciating rapidly in value, but it is generally considered risky.
Key Metrics Explained
Net Operating Income (NOI): This is your total income minus operating expenses (Taxes, Insurance, Repairs) before paying the mortgage. It shows the raw profitability of the asset itself.
Cap Rate (Capitalization Rate): Calculated as NOI / Purchase Price. This percentage helps you compare the return of a property assuming you bought it with all cash. A higher Cap Rate generally indicates a better return, though often associated with higher risk areas.
Cash on Cash ROI: Calculated as Annual Cash Flow / Total Cash Invested. This is the most important metric for investors using leverage (mortgages). It tells you exactly how hard your down payment is working for you.
Example Calculation
Let's look at a realistic scenario to illustrate how these numbers work:
Purchase Price: $200,000
Down Payment: $40,000 (20%)
Mortgage: $160,000 at 6.5% for 30 years = ~$1,011/month (P&I)