function calculateRentalCashFlow() {
// Get Inputs
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value) || 0;
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var interestRate = parseFloat(document.getElementById('interestRate').value) || 0;
var loanTerm = parseFloat(document.getElementById('loanTerm').value) || 30;
var closingCosts = parseFloat(document.getElementById('closingCosts').value) || 0;
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var propTaxes = parseFloat(document.getElementById('propTaxes').value) || 0;
var insurance = parseFloat(document.getElementById('insurance').value) || 0;
var hoa = parseFloat(document.getElementById('hoa').value) || 0;
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value) || 0;
var repairsRate = parseFloat(document.getElementById('repairsRate').value) || 0;
var capexRate = parseFloat(document.getElementById('capexRate').value) || 0;
var mgmtRate = parseFloat(document.getElementById('mgmtRate').value) || 0;
// Validation
if (purchasePrice 0) {
cocReturn = (annualCashFlow / totalCashInvested) * 100;
}
var capRate = 0;
if (purchasePrice > 0) {
capRate = ((noi * 12) / purchasePrice) * 100;
}
// Format Currency
var fmt = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
var fmtPct = new Intl.NumberFormat('en-US', { style: 'percent', minimumFractionDigits: 2 });
// Display Results
document.getElementById('results').style.display = 'block';
document.getElementById('resGrossRent').innerText = fmt.format(monthlyRent);
document.getElementById('resOpExpenses').innerText = fmt.format(totalOperatingExpenses);
document.getElementById('resNOI').innerText = fmt.format(noi);
document.getElementById('resMortgage').innerText = fmt.format(mortgagePayment);
var cfEl = document.getElementById('resCashFlow');
cfEl.innerText = fmt.format(monthlyCashFlow);
cfEl.className = monthlyCashFlow >= 0 ? "result-value positive" : "result-value negative";
var cocEl = document.getElementById('resCoC');
cocEl.innerText = cocReturn.toFixed(2) + "%";
cocEl.className = cocReturn >= 0 ? "result-value positive" : "result-value negative";
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + "%";
}
How to Analyze a Rental Property
Investing in real estate is one of the most reliable ways to build wealth, but simply buying a property doesn't guarantee profit. To ensure a smart investment, you must analyze the numbers thoroughly. This Rental Property Cash Flow Calculator helps investors determine if a potential deal will generate positive income or drain resources.
Key Metrics Explained
Understanding the output of your calculation is just as important as the inputs. Here are the definitions of the key financial metrics provided by this calculator:
Cash Flow: This is the net profit you pocket every month after all expenses, including the mortgage, are paid. Positive cash flow means the property pays for itself and provides income. Negative cash flow means you are losing money every month to hold the property.
NOI (Net Operating Income): This represents the profitability of the property before factoring in the mortgage. It is calculated by subtracting operating expenses from the gross income. Lenders often look at NOI to determine the property's ability to service debt.
Cash on Cash Return (CoC): This measures the annual return on the actual cash you invested (down payment + closing costs). A 10% CoC return implies that for every $100 you invested, you are getting $10 back annually in cash flow. This is a critical metric for comparing real estate against other investment vehicles like stocks.
Cap Rate (Capitalization Rate): This measures the property's natural rate of return assuming it was bought with all cash. It helps compare the profitability of different properties regardless of financing terms.
Why Include Vacancy and Repairs?
Novice investors often make the mistake of calculating cash flow by simply subtracting the mortgage from the rent (Rent – Mortgage = Profit). This is dangerous because it ignores inevitable costs.
Vacancy: Your property will not be occupied 365 days a year. A 5% vacancy rate sets aside money for turnover periods between tenants.
Repairs & CapEx: Toilets break, roofs leak, and water heaters fail. Setting aside 5-10% of monthly rent ensures you have the funds ready when these expensive repairs arise, preventing them from destroying your ROI.
Using the Calculator
To use this calculator effectively, input your purchase price and financing details first. Then, estimate your monthly expenses accurately. If you don't know the exact property tax or insurance rates, look at similar listings in the area (Zillow or Redfin often provide estimates). Always aim for conservative estimates to ensure your investment is safe even in worst-case scenarios.