Investing in real estate requires precise calculations to ensure a property will be profitable. This Rental Property Cash Flow Calculator helps investors analyze the potential return on investment (ROI) by accounting for income, debt service, and operating expenses.
Key Metrics Explained
Monthly Cash Flow: This is your profit after all expenses, including the mortgage, are paid. A positive cash flow means the property pays for itself and generates income.
Formula: Monthly Rent – Total Monthly Expenses
Net Operating Income (NOI): This metric looks at the profitability of the property excluding the mortgage payments. It is crucial for determining the raw potential of the asset.
Formula: Income – Operating Expenses (excluding debt service)
Cash on Cash Return (CoC): This measures the annual return on the actual cash you invested (down payment + closing costs). It is often compared to stock market returns to judge efficiency.
Formula: (Annual Cash Flow / Total Cash Invested) × 100
Cap Rate (Capitalization Rate): A standard measure to compare different real estate investments. It represents the rate of return on the property based on the income the property is expected to generate.
Formula: (Annual NOI / Purchase Price) × 100
Estimating Expenses
Many new investors underestimate expenses. Beyond the mortgage, ensure you account for:
Vacancy: Properties won't be rented 100% of the time. Allocating 5-8% of rent for vacancy is standard.
Maintenance: Toilets break and roofs leak. Setting aside 5-10% of monthly rent creates a safety net for repairs.
Capital Expenditures (CapEx): Major replacements like HVAC or water heaters should be budgeted for separately or included in your maintenance percentage.
What is a Good Cash Flow?
While "good" is subjective, many investors aim for $100–$200 per door per month in pure cash flow, or a Cash on Cash return of 8-12%. However, in high-appreciation markets, investors might accept lower cash flow in exchange for long-term equity growth.
function calculateRentalCashFlow() {
// 1. Get Inputs
var price = parseFloat(document.getElementById('rp_price').value);
var downPercent = parseFloat(document.getElementById('rp_down_percent').value);
var closingCostsPercent = parseFloat(document.getElementById('rp_closing_costs').value);
var interestRate = parseFloat(document.getElementById('rp_interest').value);
var termYears = parseFloat(document.getElementById('rp_term').value);
var rent = parseFloat(document.getElementById('rp_rent').value);
var taxRate = parseFloat(document.getElementById('rp_tax_rate').value);
var insuranceYearly = parseFloat(document.getElementById('rp_insurance').value);
var hoaMonthly = parseFloat(document.getElementById('rp_hoa').value);
var maintPercent = parseFloat(document.getElementById('rp_maintenance').value);
var vacancyPercent = parseFloat(document.getElementById('rp_vacancy').value);
// Validation
if (isNaN(price) || isNaN(rent)) {
alert("Please enter valid numbers for Price and Rent.");
return;
}
// 2. Calculate Initial Investment
var downPayment = price * (downPercent / 100);
var closingCosts = price * (closingCostsPercent / 100);
var totalCashInvested = downPayment + closingCosts;
var loanAmount = price – downPayment;
// 3. Calculate Mortgage (P&I)
var monthlyRate = (interestRate / 100) / 12;
var numPayments = termYears * 12;
var mortgagePayment = 0;
if (interestRate === 0) {
mortgagePayment = loanAmount / numPayments;
} else {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
}
// 4. Calculate Monthly Expenses
var taxMonthly = (price * (taxRate / 100)) / 12;
var insuranceMonthly = insuranceYearly / 12;
var vacancyMonthly = rent * (vacancyPercent / 100);
var maintenanceMonthly = rent * (maintPercent / 100);
var totalOperatingExpenses = taxMonthly + insuranceMonthly + hoaMonthly + vacancyMonthly + maintenanceMonthly;
var totalMonthlyExpenses = totalOperatingExpenses + mortgagePayment;
// 5. Calculate Metrics
var monthlyCashFlow = rent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// NOI (Net Operating Income) = Income – Operating Expenses (No Mortgage)
var monthlyNOI = rent – totalOperatingExpenses;
var annualNOI = monthlyNOI * 12;
var cocReturn = (annualCashFlow / totalCashInvested) * 100;
var capRate = (annualNOI / price) * 100;
// 6. Update DOM
var resultDiv = document.getElementById('rp_results');
resultDiv.style.display = 'block';
// Format Helper
function formatMoney(num) {
return '$' + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}
document.getElementById('res_mortgage').innerText = formatMoney(mortgagePayment);
document.getElementById('res_total_expenses').innerText = formatMoney(totalMonthlyExpenses);
document.getElementById('res_noi').innerText = formatMoney(monthlyNOI);
var cfElement = document.getElementById('res_cash_flow');
cfElement.innerText = formatMoney(monthlyCashFlow);
// Style cash flow based on positivity
if (monthlyCashFlow >= 0) {
cfElement.className = "rp-result-value rp-highlight";
} else {
cfElement.className = "rp-result-value rp-highlight-neg";
}
document.getElementById('res_coc').innerText = cocReturn.toFixed(2) + '%';
document.getElementById('res_cap_rate').innerText = capRate.toFixed(2) + '%';
}