Investing in real estate is a powerful way to build wealth, but accurate calculations are the foundation of a successful portfolio. This Rental Property Cash Flow & ROI Calculator helps investors determine the viability of a potential deal by analyzing income, expenses, and return metrics.
Key Metrics Explained
Cash Flow: This is the profit you bring in each month after all operating expenses and mortgage payments are made. Positive cash flow is essential for long-term sustainability.
Cash on Cash ROI: This metric calculates the annual return on the actual cash you invested (Down Payment + Closing Costs). It is a critical measure of how hard your money is working for you.
Cap Rate (Capitalization Rate): This measures the property's natural rate of return assuming it was bought with cash. It helps compare different properties regardless of financing.
NOI (Net Operating Income): Total income minus operating expenses (excluding mortgage payments). This figure is used to calculate the Cap Rate.
How to Estimate Expenses
New investors often underestimate expenses. When using this calculator, ensure you account for:
Vacancy & Maintenance: It is standard practice to set aside 5-10% of gross rent for repairs and periods where the unit is unoccupied.
Property Taxes: These vary significantly by county. Check local tax assessor websites for accurate historical data.
Insurance: Quotes depend on the property type, location, and coverage level. Landlord policies typically cost 15-25% more than standard homeowner policies.
By inputting conservative estimates into the calculator above, you can safeguard your investment against unexpected costs and ensure your rental property remains profitable.
function calculateRentalROI() {
// Get Inputs
var price = parseFloat(document.getElementById('purchasePrice').value);
var down = parseFloat(document.getElementById('downPayment').value);
var closing = parseFloat(document.getElementById('closingCosts').value);
var rate = parseFloat(document.getElementById('interestRate').value);
var years = parseFloat(document.getElementById('loanTerm').value);
var rent = parseFloat(document.getElementById('monthlyRent').value);
var taxRate = parseFloat(document.getElementById('propertyTaxRate').value);
var insuranceAnnual = parseFloat(document.getElementById('annualInsurance').value);
var hoa = parseFloat(document.getElementById('hoaFees').value);
var maintPercent = parseFloat(document.getElementById('maintenanceRate').value);
// Validation
if (isNaN(price) || isNaN(down) || isNaN(rent)) {
alert("Please enter valid numbers for Price, Down Payment, and Rent.");
return;
}
// 1. Calculate Mortgage (PI)
var loanAmount = price – down;
var monthlyRate = (rate / 100) / 12;
var numPayments = years * 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);
}
// 2. Calculate Monthly Expenses
var monthlyTax = (price * (taxRate / 100)) / 12;
var monthlyInsurance = insuranceAnnual / 12;
var monthlyMaintVacancy = rent * (maintPercent / 100);
var totalOperatingExpenses = monthlyTax + monthlyInsurance + hoa + monthlyMaintVacancy;
var totalMonthlyExpenses = totalOperatingExpenses + mortgagePayment;
// 3. Calculate Cash Flow
var monthlyCashFlow = rent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// 4. Calculate NOI (Net Operating Income)
// NOI = Annual Income – Annual Operating Expenses (No Mortgage)
var annualOperatingExpenses = totalOperatingExpenses * 12;
var annualNOI = (rent * 12) – annualOperatingExpenses;
// 5. Calculate Returns
var totalInitialInvestment = down + closing;
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
var cocRoi = 0;
if (totalInitialInvestment > 0) {
cocRoi = (annualCashFlow / totalInitialInvestment) * 100;
}
// Update UI
document.getElementById('resMortgage').innerText = formatCurrency(mortgagePayment);
document.getElementById('resTotalExpenses').innerText = formatCurrency(totalMonthlyExpenses);
var cashFlowEl = document.getElementById('resCashFlow');
cashFlowEl.innerText = formatCurrency(monthlyCashFlow);
if (monthlyCashFlow >= 0) {
cashFlowEl.className = "rp-result-value rp-highlight";
} else {
cashFlowEl.className = "rp-result-value rp-negative";
}
document.getElementById('resNOI').innerText = formatCurrency(annualNOI);
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + "%";
var cocEl = document.getElementById('resCocROI');
cocEl.innerText = cocRoi.toFixed(2) + "%";
if (cocRoi >= 0) {
cocEl.className = "rp-result-value rp-highlight";
} else {
cocEl.className = "rp-result-value rp-negative";
}
// Show results container
document.getElementById('results').style.display = "block";
}
function formatCurrency(num) {
return "$" + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}