Mortgage Rates Today California Calculator

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Rental Property ROI Calculator

Calculate Cash Flow, Cap Rate, and Cash on Cash Return for your real estate investment.

30 Years 15 Years Cash Purchase (No Loan)

Investment Analysis

Total Initial Investment (Cash Needed): $0.00
Monthly Principal & Interest: $0.00
Total Monthly Expenses (incl. Reserves): $0.00
Monthly Cash Flow: $0.00
Net Operating Income (NOI) Annual: $0.00
Cap Rate: 0.00%
Cash on Cash Return: 0.00%

Understanding Rental Property Investment Metrics

Investing in real estate is a numbers game. To ensure a profitable portfolio, investors must look beyond the monthly rent check and analyze the underlying efficiency of their capital. This Rental Property ROI Calculator helps you determine the viability of a potential investment property by breaking down three critical metrics: Cash Flow, Cap Rate, and Cash on Cash Return.

1. Monthly Cash Flow

Cash flow is the profit you bring in each month after all expenses are paid. It is calculated as:

  • Total Income (Rent + Other Income) minus Total Expenses (Mortgage, Taxes, Insurance, HOA, Repairs, Vacancy).

Positive cash flow ensures the property pays for itself. For example, if you collect $2,200 in rent and your total expenses (including mortgage) are $1,900, your monthly cash flow is $300.

2. Capitalization Rate (Cap Rate)

The Cap Rate measures the natural rate of return on the property, independent of debt financing. It is crucial for comparing properties as if they were bought with cash.

Formula: Net Operating Income (NOI) / Purchase Price

The NOI is your annual income minus operating expenses (excluding mortgage payments). A higher Cap Rate generally indicates a better return, though it may come with higher risk.

3. Cash on Cash Return (CoC)

This is arguably the most important metric for leveraged investors. It measures the annual return on the actual cash you invested (Down Payment + Closing Costs).

Formula: Annual Pre-Tax Cash Flow / Total Cash Invested

If you invest $55,000 cash to buy a property and it generates $5,500 in annual profit after mortgage payments, your Cash on Cash return is 10%. This allows you to compare real estate returns against stocks or bonds.

How to Use This Calculator

Enter your property details in the fields above. Be sure to estimate a percentage for Maintenance/Vacancy (typically 5-10% depending on the property age and location) to get a realistic view of your long-term returns. The calculator will instantly output your projected returns to help you make an informed purchase decision.

function calculateRentalROI() { // 1. Get Input Values var price = parseFloat(document.getElementById("purchasePrice").value) || 0; var closing = parseFloat(document.getElementById("closingCosts").value) || 0; var downPercent = parseFloat(document.getElementById("downPaymentPercent").value) || 0; var interestRate = parseFloat(document.getElementById("interestRate").value) || 0; var termYears = parseInt(document.getElementById("loanTerm").value) || 0; var monthlyRent = parseFloat(document.getElementById("monthlyRent").value) || 0; var taxYearly = parseFloat(document.getElementById("propertyTax").value) || 0; var insuranceYearly = parseFloat(document.getElementById("insurance").value) || 0; var hoaMonthly = parseFloat(document.getElementById("hoa").value) || 0; var reservePercent = parseFloat(document.getElementById("maintenance").value) || 0; // 2. Calculate Loan Details var downPaymentAmount = price * (downPercent / 100); var loanAmount = price – downPaymentAmount; var totalCashInvested = downPaymentAmount + closing; var monthlyMortgage = 0; if (termYears > 0 && loanAmount > 0) { var monthlyRate = (interestRate / 100) / 12; var numberOfPayments = termYears * 12; // PMT Formula: P * (r(1+r)^n) / ((1+r)^n – 1) if (monthlyRate > 0) { monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1); } else { monthlyMortgage = loanAmount / numberOfPayments; } } // 3. Calculate Expenses var reserveCostMonthly = monthlyRent * (reservePercent / 100); var taxMonthly = taxYearly / 12; var insuranceMonthly = insuranceYearly / 12; // Total Operating Expenses (NOI deduction) -> Excludes Mortgage var monthlyOpEx = taxMonthly + insuranceMonthly + hoaMonthly + reserveCostMonthly; var annualOpEx = monthlyOpEx * 12; // Total Expenses for Cash Flow (Includes Mortgage) var totalMonthlyExpenses = monthlyOpEx + monthlyMortgage; // 4. Calculate Key Metrics var annualIncome = monthlyRent * 12; // Net Operating Income (Income – OpEx) var noi = annualIncome – annualOpEx; // Cash Flow var monthlyCashFlow = monthlyRent – totalMonthlyExpenses; var annualCashFlow = monthlyCashFlow * 12; // Cap Rate: (NOI / Price) * 100 var capRate = 0; if (price > 0) { capRate = (noi / price) * 100; } // Cash on Cash Return: (Annual Cash Flow / Total Cash Invested) * 100 var cocReturn = 0; if (totalCashInvested > 0) { cocReturn = (annualCashFlow / totalCashInvested) * 100; } // 5. Update DOM document.getElementById("res-investment").innerText = "$" + totalCashInvested.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById("res-mortgage").innerText = "$" + monthlyMortgage.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById("res-expenses").innerText = "$" + totalMonthlyExpenses.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2}); var cashFlowEl = document.getElementById("res-monthly-cashflow"); cashFlowEl.innerText = "$" + monthlyCashFlow.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2}); if (monthlyCashFlow >= 0) { cashFlowEl.className = "roi-positive"; } else { cashFlowEl.className = "roi-negative"; } document.getElementById("res-noi").innerText = "$" + noi.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById("res-cap-rate").innerText = capRate.toFixed(2) + "%"; var cocEl = document.getElementById("res-coc"); cocEl.innerText = cocReturn.toFixed(2) + "%"; if (cocReturn >= 0) { cocEl.className = "roi-positive"; } else { cocEl.className = "roi-negative"; } // Show results section document.querySelector(".rental-results").style.display = "block"; }

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