Calculate Cash on Cash Return, Cap Rate, and Monthly Cash Flow.
(Taxes, Ins, HOA, Maintenance)
Monthly Mortgage Payment (P&I):$0.00
Total Monthly Expenses:$0.00
Net Operating Income (NOI – Annual):$0.00
Monthly Cash Flow:$0.00
Cap Rate:0.00%
Cash on Cash Return:0.00%
function calculateROI() {
// 1. Get Input Values
var price = parseFloat(document.getElementById("purchasePrice").value);
var downPay = 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 expenses = parseFloat(document.getElementById("monthlyExpenses").value);
// 2. Validate Inputs
if (isNaN(price) || isNaN(downPay) || isNaN(rate) || isNaN(term) || isNaN(rent) || isNaN(expenses)) {
alert("Please fill in all fields with valid numbers.");
return;
}
// 3. Calculate Mortgage (Principal & Interest)
var loanAmount = price – downPay;
var monthlyRate = (rate / 100) / 12;
var numPayments = term * 12;
var mortgagePayment = 0;
if (rate === 0) {
mortgagePayment = loanAmount / numPayments;
} else {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
}
// 4. Calculate Operational Metrics
var totalMonthlyExpenses = mortgagePayment + expenses;
var monthlyCashFlow = rent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// 5. Calculate NOI (Net Operating Income)
// NOI excludes mortgage payments (Debt Service)
var monthlyNOI = rent – expenses;
var annualNOI = monthlyNOI * 12;
// 6. Calculate Cap Rate
// Cap Rate = Annual NOI / Purchase Price
var capRate = (annualNOI / price) * 100;
// 7. Calculate Cash on Cash Return
// CoC = Annual Cash Flow / Total Cash Invested (assuming Down Payment is total investment for simplicity)
var cocReturn = 0;
if (downPay > 0) {
cocReturn = (annualCashFlow / downPay) * 100;
} else {
// Edge case: 0 down payment means infinite return technically, but show 0 or handle text
cocReturn = 0;
}
// 8. Update HTML
var resMortgage = document.getElementById("resMortgage");
var resTotalExp = document.getElementById("resTotalExp");
var resNOI = document.getElementById("resNOI");
var resCashFlow = document.getElementById("resCashFlow");
var resCapRate = document.getElementById("resCapRate");
var resCoC = document.getElementById("resCoC");
var resultsArea = document.getElementById("resultsArea");
resMortgage.innerText = "$" + mortgagePayment.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
resTotalExp.innerText = "$" + totalMonthlyExpenses.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
resNOI.innerText = "$" + annualNOI.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
// Formatting Cash Flow with color
resCashFlow.innerText = "$" + monthlyCashFlow.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
if (monthlyCashFlow >= 0) {
resCashFlow.style.color = "#27ae60";
} else {
resCashFlow.style.color = "#c0392b";
}
resCapRate.innerText = capRate.toFixed(2) + "%";
resCoC.innerText = cocReturn.toFixed(2) + "%";
// Coloring the percentages
if (cocReturn < 0) {
resCoC.style.color = "#c0392b";
} else {
resCoC.style.color = "#27ae60";
}
// Show results
resultsArea.style.display = "block";
}
Understanding Rental Property Investment Metrics
Investing in real estate is a numbers game. To ensure your investment is profitable, you must analyze the property using specific financial metrics. This calculator helps you determine the viability of a potential rental property by calculating the Cash on Cash Return and Capitalization Rate (Cap Rate).
What is Cash on Cash Return?
Cash on Cash Return is a metric used to calculate the cash income earned on the cash invested in a property. It measures the annual return the investor made on the property in relation to the amount of mortgage paid during the same year.
Formula: Cash on Cash Return = (Annual Pre-Tax Cash Flow / Total Cash Invested) x 100%
For example, if you invest $50,000 as a down payment and the property generates $5,000 in positive cash flow after all expenses and mortgage payments are made for the year, your Cash on Cash return is 10%.
What is Cap Rate?
The Capitalization Rate (Cap Rate) indicates the rate of return that is expected to be generated on a real estate investment property. Unlike Cash on Cash return, Cap Rate ignores the mortgage financing and focuses solely on the property's purchase price and its ability to generate income.
Formula: Cap Rate = (Net Operating Income / Current Market Value) x 100%
Net Operating Income (NOI) is calculated by subtracting all operating expenses (management fees, maintenance, taxes, insurance) from the total revenue generated by the property. Note that mortgage payments are not included in NOI calculations.
How to Use This Calculator
Purchase Price: Enter the total cost to buy the property.
Down Payment: Enter the cash amount you are paying upfront.
Loan Details: Input your interest rate and the term of the mortgage (usually 15 or 30 years).
Rental Income: Estimate the gross monthly rent you expect to collect.
Monthly Expenses: Sum up property taxes, insurance, HOA fees, vacancy reserves, and maintenance costs.
Interpreting Your Results
Positive Cash Flow: This is the net profit you take home every month. A positive number means the property pays for itself and provides income.
Good Cap Rate: Generally, a Cap Rate between 4% and 10% is considered good, though this varies heavily by location and asset class.
Negative Returns: If your Cash Flow is red (negative), the property costs more to hold than it generates in rent. This is usually a sign to renegotiate the price or look for a different deal.