function calculateRental() {
// 1. Get Input Values
var price = parseFloat(document.getElementById("purchasePrice").value);
var down = parseFloat(document.getElementById("downPayment").value);
var rate = parseFloat(document.getElementById("interestRate").value);
var term = parseFloat(document.getElementById("loanTerm").value);
var rent = parseFloat(document.getElementById("monthlyRent").value);
var tax = parseFloat(document.getElementById("annualTax").value);
var insurance = parseFloat(document.getElementById("annualInsurance").value);
var vacancyPct = parseFloat(document.getElementById("vacancyRate").value);
var maintPct = parseFloat(document.getElementById("maintenanceRate").value);
var mgmtPct = parseFloat(document.getElementById("managementFee").value);
// Validation
if (isNaN(price) || isNaN(down) || isNaN(rate) || isNaN(term) || isNaN(rent)) {
alert("Please enter valid numbers for all fields.");
return;
}
// 2. Calculate Mortgage
var principal = price – down;
var monthlyRate = (rate / 100) / 12;
var numPayments = term * 12;
var mortgage = 0;
if (rate === 0) {
mortgage = principal / numPayments;
} else {
mortgage = principal * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
}
// 3. Calculate Monthly Expenses
var monthlyTax = tax / 12;
var monthlyIns = insurance / 12;
var vacancyCost = rent * (vacancyPct / 100);
var maintCost = rent * (maintPct / 100);
var mgmtCost = rent * (mgmtPct / 100);
var totalMonthlyExpenses = mortgage + monthlyTax + monthlyIns + vacancyCost + maintCost + mgmtCost;
var operatingExpenses = monthlyTax + monthlyIns + vacancyCost + maintCost + mgmtCost; // Excludes mortgage for NOI
// 4. Calculate Metrics
var monthlyCashFlow = rent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
var annualNOI = (rent * 12) – (operatingExpenses * 12);
var capRate = (annualNOI / price) * 100;
var cashOnCash = (down > 0) ? (annualCashFlow / down) * 100 : 0;
// 5. Update UI
document.getElementById("result-mortgage").innerText = "$" + mortgage.toFixed(2);
document.getElementById("result-expenses").innerText = "$" + totalMonthlyExpenses.toFixed(2);
var cashFlowEl = document.getElementById("result-cashflow");
cashFlowEl.innerText = "$" + monthlyCashFlow.toFixed(2);
cashFlowEl.className = "result-value " + (monthlyCashFlow >= 0 ? "positive" : "negative");
document.getElementById("result-noi").innerText = "$" + annualNOI.toFixed(2);
document.getElementById("result-caprate").innerText = capRate.toFixed(2) + "%";
var cocEl = document.getElementById("result-coc");
cocEl.innerText = cashOnCash.toFixed(2) + "%";
cocEl.className = "result-value " + (cashOnCash >= 0 ? "positive" : "negative");
document.getElementById("calc-results").style.display = "block";
}
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 profit. The key to a successful rental investment is positive cash flow. Our Rental Property Cash Flow Calculator helps investors analyze deals quickly to determine if a property will be an asset or a liability.
Key Metrics Explained
1. Monthly Cash Flow
This is the profit you take home each month after all expenses are paid. It is calculated as:
Gross Income: Your monthly rent.
Minus Expenses: Mortgage (P&I), property taxes, insurance, vacancy allowance, repairs, and management fees.
A positive cash flow means the property pays for itself and generates income. A negative cash flow means you are losing money every month to hold the property.
2. Cap Rate (Capitalization Rate)
The Cap Rate measures the natural rate of return on the property assuming it was bought with cash (no mortgage). It allows you to compare the profitability of different properties regardless of how they are financed. A higher cap rate generally implies a better return (and potentially higher risk).
3. Cash on Cash Return
This is arguably the most important metric for leveraged investors. It calculates the annual return on the actual cash you invested (your down payment and closing costs). For example, if you invest $50,000 and the property generates $5,000 in annual profit, your Cash on Cash return is 10%. This metric helps you compare real estate returns against other investment vehicles like stocks or bonds.
Why Factor in Vacancy and Maintenance?
Many new investors make the mistake of calculating cash flow based solely on Rent minus Mortgage. This often leads to disaster. Realistically, tenants move out (Vacancy), toilets break (Maintenance), and annual bills (Tax/Insurance) must be paid. A safe analysis typically allocates 5-10% of rent for vacancy and another 5-10% for repairs/capital expenditures (CapEx).