Investing in real estate is one of the most reliable ways to build long-term wealth, but success hinges on the numbers. A beautiful property in a great neighborhood can still be a financial burden if the cash flow doesn't align with your investment goals. Our Rental Property Cash Flow Calculator is designed to cut through the complexity and provide investors with the critical metrics needed to make informed decisions.
What is Cash Flow?
Cash flow is the net amount of money moving in and out of a business or investment. In real estate, positive cash flow means the property's rental income exceeds all expenses, including the mortgage, taxes, insurance, and maintenance. This is "profit" you can put in your pocket every month.
The Formula: Cash Flow = Total Income – Total Expenses
Key Metrics Explained
Cash on Cash Return (CoC ROI): This is arguably the most important metric for investors. It measures the annual return you are making on the actual cash you invested (Down Payment + Closing Costs), rather than the total price of the property. A CoC ROI of 8-12% is generally considered a solid target for rental properties.
Cap Rate (Capitalization Rate): This metric evaluates the profitability of a property regardless of how it is financed. It is calculated by dividing the Net Operating Income (NOI) by the property's purchase price. It helps compare properties directly, assuming an all-cash purchase.
Net Operating Income (NOI): This is your annual rental income minus all operating expenses (taxes, insurance, maintenance, vacancy) but excluding mortgage payments. Lenders look at this number closely.
How to Estimate Expenses
Novice investors often underestimate the costs of running a rental. To get an accurate calculation, ensure you account for:
Vacancy Rate: Properties won't be rented 100% of the time. A 5% vacancy rate (about 18 days a year) is a standard conservative estimate.
Maintenance & CapEx: Even new homes need repairs. Setting aside 5-10% of monthly rent for future repairs (HVAC replacement, roof leaks, painting) prevents cash flow shocks later.
Property Management: If you aren't managing it yourself, expect to pay 8-10% of the monthly rent to a management company (you can add this to the Maintenance field in the calculator above for a rough estimate).
Why This Calculator Matters
By inputting your specific loan terms, anticipated rent, and realistic expense estimates, you can avoid "negative cash flow" properties that drain your bank account. Use this tool to analyze multiple deals, adjust your offer price, or determine the maximum interest rate you can afford while still maintaining profitability.
function calculateRental() {
// 1. Get Inputs
var purchasePrice = parseFloat(document.getElementById('rpcPurchasePrice').value) || 0;
var downPaymentPercent = parseFloat(document.getElementById('rpcDownPayment').value) || 0;
var interestRate = parseFloat(document.getElementById('rpcInterestRate').value) || 0;
var loanTerm = parseFloat(document.getElementById('rpcLoanTerm').value) || 0;
var closingCosts = parseFloat(document.getElementById('rpcClosingCosts').value) || 0;
var monthlyRent = parseFloat(document.getElementById('rpcRent').value) || 0;
var annualPropTax = parseFloat(document.getElementById('rpcPropTax').value) || 0;
var annualInsurance = parseFloat(document.getElementById('rpcInsurance').value) || 0;
var maintenancePercent = parseFloat(document.getElementById('rpcMaintenance').value) || 0;
var vacancyPercent = parseFloat(document.getElementById('rpcVacancy').value) || 0;
// 2. Perform Calculations
// Loan Details
var downPaymentAmount = purchasePrice * (downPaymentPercent / 100);
var loanAmount = purchasePrice – downPaymentAmount;
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
// Mortgage Payment (Principal + Interest)
var mortgagePayment = 0;
if (monthlyRate > 0) {
mortgagePayment = (loanAmount * monthlyRate) / (1 – Math.pow(1 + monthlyRate, -numberOfPayments));
} else {
mortgagePayment = loanAmount / numberOfPayments;
}
// Monthly Expenses
var monthlyTax = annualPropTax / 12;
var monthlyInsurance = annualInsurance / 12;
var monthlyVacancy = monthlyRent * (vacancyPercent / 100);
var monthlyMaintenance = monthlyRent * (maintenancePercent / 100);
var totalOperatingExpenses = monthlyTax + monthlyInsurance + monthlyVacancy + monthlyMaintenance;
var totalMonthlyExpenses = totalOperatingExpenses + mortgagePayment;
// Cash Flow
var monthlyCashFlow = monthlyRent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// Metrics
var noi = (monthlyRent * 12) – (totalOperatingExpenses * 12);
var totalCashInvested = downPaymentAmount + closingCosts;
var cashOnCash = 0;
if (totalCashInvested > 0) {
cashOnCash = (annualCashFlow / totalCashInvested) * 100;
}
var capRate = 0;
if (purchasePrice > 0) {
capRate = (noi / purchasePrice) * 100;
}
// 3. Update DOM
var resultContainer = document.getElementById('rpcResults');
resultContainer.style.display = 'block';
// Helper for currency formatting
var fmtMoney = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
document.getElementById('displayCashFlow').innerHTML = fmtMoney.format(monthlyCashFlow);
document.getElementById('displayTotalExp').innerHTML = fmtMoney.format(totalMonthlyExpenses);
document.getElementById('displayNOI').innerHTML = fmtMoney.format(noi);
document.getElementById('displayCoC').innerHTML = cashOnCash.toFixed(2) + '%';
document.getElementById('displayCapRate').innerHTML = capRate.toFixed(2) + '%';
// Color coding for Cash Flow
var cfElement = document.getElementById('displayCashFlow');
if (monthlyCashFlow >= 0) {
cfElement.style.color = '#27ae60';
} else {
cfElement.style.color = '#e74c3c';
}
}