Investment Analysis Results
Monthly Mortgage (P&I)
$0
Total Monthly Expenses
$0
Net Monthly Cash Flow
$0
Annual Cash-on-Cash ROI
0%
Capitalization Rate (Cap Rate)
0%
function calculateRentalROI() {
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value);
var downPercent = parseFloat(document.getElementById('downPaymentPercent').value) / 100;
var interestRate = (parseFloat(document.getElementById('interestRate').value) / 100) / 12;
var loanTermMonths = parseFloat(document.getElementById('loanTerm').value) * 12;
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value);
var monthlyTax = parseFloat(document.getElementById('propertyTax').value);
var monthlyIns = parseFloat(document.getElementById('insurance').value);
var monthlyMaint = parseFloat(document.getElementById('maintenance').value);
if (isNaN(purchasePrice) || isNaN(monthlyRent)) {
alert("Please enter valid numbers for price and rent.");
return;
}
var downPaymentAmount = purchasePrice * downPercent;
var loanAmount = purchasePrice – downPaymentAmount;
// Mortgage Calculation (P&I)
var monthlyMortgage = 0;
if (interestRate > 0) {
monthlyMortgage = loanAmount * (interestRate * Math.pow(1 + interestRate, loanTermMonths)) / (Math.pow(1 + interestRate, loanTermMonths) – 1);
} else {
monthlyMortgage = loanAmount / loanTermMonths;
}
var totalMonthlyExpenses = monthlyTax + monthlyIns + monthlyMaint + monthlyMortgage;
var monthlyCashFlow = monthlyRent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
var cashOnCashROI = (annualCashFlow / downPaymentAmount) * 100;
// Cap Rate Calculation (Net Operating Income / Purchase Price)
var annualNOI = (monthlyRent – (monthlyTax + monthlyIns + monthlyMaint)) * 12;
var capRate = (annualNOI / purchasePrice) * 100;
document.getElementById('resMortgage').innerText = "$" + monthlyMortgage.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resExpenses').innerText = "$" + totalMonthlyExpenses.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resCashFlow').innerText = "$" + monthlyCashFlow.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resROI').innerText = cashOnCashROI.toFixed(2) + "%";
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + "%";
document.getElementById('resultsArea').style.display = "block";
}
Understanding Rental Property Cash Flow Analysis
Investing in real estate is one of the most proven ways to build wealth, but the key to success lies in the math. Before purchasing a rental property, it is critical to calculate the potential Cash Flow and Return on Investment (ROI) to ensure the asset provides a positive return after all expenses are paid.
Key Metrics Explained
- Net Monthly Cash Flow: This is the amount of money left in your pocket after every single expense—including your mortgage, taxes, insurance, and maintenance—has been paid. A positive cash flow is the hallmark of a healthy investment.
- Cash-on-Cash ROI: This metric measures the annual return you receive based specifically on the actual cash you invested (your down payment). For many investors, a "good" cash-on-cash return is typically between 8% and 12%.
- Cap Rate: The Capitalization Rate is used to compare different real estate investments regardless of the financing used. It is calculated by dividing the Net Operating Income (NOI) by the purchase price.
Calculation Example
Imagine you purchase a property for $250,000 with a 20% down payment ($50,000). At a 6.5% interest rate, your monthly mortgage payment (Principal and Interest) would be approximately $1,264.14. If you collect $2,200 in monthly rent and your operating expenses (taxes, insurance, and maintenance) total $500, your monthly cash flow would be:
$2,200 (Rent) – $1,264 (Mortgage) – $500 (Expenses) = $436 Monthly Cash Flow
To find your annual ROI: ($436 x 12 months) / $50,000 investment = 10.46% Cash-on-Cash Return.
Pro Tips for More Accurate Calculations
When using this calculator, don't forget to account for "hidden" costs. Many seasoned investors include a "Vacancy Rate" (usually 5% of monthly rent) and a "Capital Expenditure" (CapEx) fund for major repairs like new roofs or HVAC systems. Including these buffer figures ensures your investment remains profitable even when unexpected costs arise.