function calculateRentalCashFlow() {
// Get Inputs
var price = parseFloat(document.getElementById('rp_price').value);
var down = parseFloat(document.getElementById('rp_down').value);
var rate = parseFloat(document.getElementById('rp_rate').value);
var term = parseFloat(document.getElementById('rp_term').value);
var rent = parseFloat(document.getElementById('rp_rent').value);
var tax = parseFloat(document.getElementById('rp_tax').value);
var insurance = parseFloat(document.getElementById('rp_insurance').value);
var maintenance = parseFloat(document.getElementById('rp_maintenance').value);
// Validation
if (isNaN(price) || isNaN(down) || isNaN(rate) || isNaN(term) || isNaN(rent) || isNaN(tax) || isNaN(insurance) || isNaN(maintenance)) {
alert("Please fill in all fields with valid numbers to calculate cash flow.");
return;
}
// Mortgage Calculation
var loanAmount = price – down;
var monthlyRate = rate / 100 / 12;
var numberOfPayments = term * 12;
var monthlyMortgage = 0;
if (rate === 0) {
monthlyMortgage = loanAmount / numberOfPayments;
} else {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
// Monthly Expenses Calculation
var monthlyTax = tax / 12;
var monthlyInsurance = insurance / 12;
var totalMonthlyExpenses = monthlyMortgage + monthlyTax + monthlyInsurance + maintenance;
// Cash Flow Calculations
var monthlyCashFlow = rent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// NOI (Net Operating Income) = Income – Operating Expenses (Excluding Mortgage)
var annualOperatingExpenses = tax + insurance + (maintenance * 12);
var annualGrossIncome = rent * 12;
var noi = annualGrossIncome – annualOperatingExpenses;
// Returns Calculations
var capRate = (noi / price) * 100;
// Estimate Closing Costs roughly as 2% of price for CoC calculation context,
// but strictly we usually just use Cash Invested. Let's assume Cash Invested = Down Payment for simplicity unless specified.
var cashInvested = down;
var cashOnCash = (annualCashFlow / cashInvested) * 100;
// Formatting currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
// Update UI
document.getElementById('res_mortgage').innerText = formatter.format(monthlyMortgage);
document.getElementById('res_expenses').innerText = formatter.format(totalMonthlyExpenses);
var cfMonthlyEl = document.getElementById('res_monthly_cf');
cfMonthlyEl.innerText = formatter.format(monthlyCashFlow);
cfMonthlyEl.className = "rp-result-value " + (monthlyCashFlow >= 0 ? "rp-positive" : "rp-negative");
var cfAnnualEl = document.getElementById('res_annual_cf');
cfAnnualEl.innerText = formatter.format(annualCashFlow);
cfAnnualEl.className = "rp-result-value " + (annualCashFlow >= 0 ? "rp-positive" : "rp-negative");
document.getElementById('res_noi').innerText = formatter.format(noi);
document.getElementById('res_coc').innerText = cashOnCash.toFixed(2) + "%";
document.getElementById('res_cap').innerText = capRate.toFixed(2) + "%";
document.getElementById('rp_results_area').style.display = "block";
}
Understanding Rental Property Cash Flow
Successful real estate investing hinges on one critical metric: Cash Flow. Simply put, cash flow is the net amount of money left in your pocket after all operating expenses and mortgage payments have been made. A positive cash flow indicates a profitable asset that generates passive income, while negative cash flow implies a liability that drains your monthly resources.
Our Rental Property Cash Flow Calculator is designed to give investors a comprehensive view of a potential deal's profitability. By analyzing key inputs like purchase price, interest rates, and maintenance costs, you can determine if a property meets your investment criteria before making an offer.
Key Metrics Explained
1. Net Operating Income (NOI)
NOI is a fundamental calculation used to analyze the profitability of income-generating real estate investments. It represents all revenue from the property minus all necessary operating expenses. Importantly, NOI excludes mortgage payments, making it a pure measure of the property's ability to generate income regardless of financing structure.
Formula: Gross Income – Operating Expenses = NOI
2. Cash on Cash Return (CoC)
While NOI looks at the property, Cash on Cash Return looks at your specific investment efficiency. It measures the annual pre-tax cash flow relative to the total cash invested (usually the down payment plus closing costs). This is arguably the most important metric for investors using leverage, as it compares the returns of real estate against other vehicles like stocks or bonds.
The Cap Rate measures a property's natural rate of return for a single year without considering mortgage financing. It is calculated by dividing the NOI by the property's current market value. Cap rates are essential for comparing the relative value of different properties in the same market.
How to Maximize Cash Flow
To improve the results shown in the calculator above, investors typically focus on two levers: increasing income or decreasing expenses.
Increase Income: Renovate to justify higher rents, add amenities like laundry or parking, or reduce vacancy rates through better tenant retention.
Decrease Expenses: Refinance for a lower interest rate, appeal property tax assessments, or perform preventative maintenance to avoid costly emergency repairs.
Use this calculator as a preliminary screening tool. Always verify estimates with actual quotes from insurance agents, lenders, and property managers to ensure your investment analysis is as accurate as possible.