function calculateRentalROI() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('rpc_price').value);
var closing = parseFloat(document.getElementById('rpc_closing').value);
var downPercent = parseFloat(document.getElementById('rpc_down_percent').value);
var interestRate = parseFloat(document.getElementById('rpc_interest').value);
var termYears = parseFloat(document.getElementById('rpc_term').value);
var rent = parseFloat(document.getElementById('rpc_rent').value);
var hoa = parseFloat(document.getElementById('rpc_hoa').value);
var yearlyTax = parseFloat(document.getElementById('rpc_tax').value);
var yearlyIns = parseFloat(document.getElementById('rpc_ins').value);
var maintPercent = parseFloat(document.getElementById('rpc_maint').value);
// 2. Validation
if (isNaN(price) || isNaN(downPercent) || isNaN(interestRate) || isNaN(termYears) || isNaN(rent)) {
alert("Please enter valid numbers for all fields.");
return;
}
// 3. Calculation Logic
// Initial Investment
var downPayment = price * (downPercent / 100);
var totalInvestment = downPayment + closing;
// Mortgage Calculation (P&I)
var loanAmount = price – downPayment;
var monthlyRate = (interestRate / 100) / 12;
var numPayments = termYears * 12;
var monthlyMortgage = 0;
if (interestRate === 0) {
monthlyMortgage = loanAmount / numPayments;
} else {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
}
// Monthly Expenses
var monthlyTax = yearlyTax / 12;
var monthlyIns = yearlyIns / 12;
var monthlyMaint = rent * (maintPercent / 100);
// Total Operating Expenses (excluding mortgage) + Mortgage
var operatingExpenses = monthlyTax + monthlyIns + monthlyMaint + hoa;
var totalMonthlyExpenses = operatingExpenses + monthlyMortgage;
// Cash Flow
var monthlyCashFlow = rent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// Cash on Cash ROI
var cocRoi = 0;
if (totalInvestment > 0) {
cocRoi = (annualCashFlow / totalInvestment) * 100;
}
// 4. Update Display
// Format helper
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
document.getElementById('res_investment').innerHTML = formatter.format(totalInvestment);
document.getElementById('res_mortgage').innerHTML = formatter.format(monthlyMortgage);
document.getElementById('res_expenses').innerHTML = formatter.format(totalMonthlyExpenses);
var cfElement = document.getElementById('res_cashflow');
cfElement.innerHTML = formatter.format(monthlyCashFlow);
if(monthlyCashFlow >= 0) {
cfElement.className = "rpc-result-value rpc-highlight";
} else {
cfElement.className = "rpc-result-value rpc-highlight-neg";
}
var cocElement = document.getElementById('res_coc');
cocElement.innerHTML = cocRoi.toFixed(2) + "%";
if(cocRoi >= 0) {
cocElement.className = "rpc-result-value rpc-highlight";
} else {
cocElement.className = "rpc-result-value rpc-highlight-neg";
}
document.getElementById('rpc_results').style.display = 'block';
}
Understanding Your Rental Property ROI
Investing in real estate is one of the most reliable ways to build wealth, but simply buying a property doesn't guarantee a profit. To succeed, investors must analyze the numbers rigorously. This Rental Property ROI Calculator helps you determine two critical metrics: Monthly Cash Flow and Cash-on-Cash Return on Investment (ROI).
What is Cash Flow?
Cash flow is the net income from a real estate investment after mortgage payments and operating expenses have been made. Positive cash flow means the property is putting money into your pocket every month, while negative cash flow means you are paying out of pocket to hold the asset.
The formula used in our calculator is: Cash Flow = Rental Income – (Mortgage + Taxes + Insurance + HOA + Maintenance + Vacancy Reserves)
Why Cash-on-Cash ROI Matters
While standard ROI looks at the total return on the property value, Cash-on-Cash ROI measures the return on the actual cash you invested (down payment + closing costs). This is often considered the most important metric for rental investors because it allows you to compare real estate returns against other investment vehicles like stocks or bonds.
A good Cash-on-Cash return varies by market, but many investors aim for 8-12%. This calculator helps you tweak your offer price, down payment, or rental estimates to see how they impact your bottom line.
Estimating Expenses Correctly
Novice investors often underestimate expenses. Beyond the mortgage, ensure you account for:
Vacancy: Properties won't be rented 100% of the time.
CapEx (Capital Expenditures): Big-ticket items like roofs and HVAC systems eventually need replacement.
Property Management: Even if you self-manage now, account for the value of your time (typically 8-10% of rent).
Use the "Maintenance Set Aside" field in the calculator above to create a buffer for these inevitable costs.