Calculating cash flow is the single most important step in analyzing a potential real estate investment. Positive cash flow means your property generates more income than it costs to own and operate, providing you with a steady stream of passive income.
How This Calculator Works
This tool analyzes the three main pillars of rental property finance:
Income: The rent you collect from tenants.
Operating Expenses: Costs including taxes, insurance, HOA fees, vacancy reserves (money set aside for when the property is empty), and maintenance reserves (money for repairs).
Debt Service: Your monthly mortgage principal and interest payment.
Key Metrics Explained
Net Operating Income (NOI)
NOI is calculated by subtracting all operating expenses from the total income, excluding the mortgage payment. It measures the raw profitability of the property itself, regardless of financing.
Cash on Cash Return (CoC)
This is arguably the most critical metric for investors. It measures the annual cash flow relative to the actual cash you invested (Down Payment + Closing Costs). A CoC return of 8-12% is generally considered solid for rental properties, though this varies by market.
Formula: (Annual Cash Flow / Total Cash Invested) × 100
Tips for Improving Cash Flow
If your calculation shows negative or low cash flow, consider:
Increase the Down Payment: This lowers the loan amount and monthly mortgage payment.
Shop for Lower Insurance: Insurance rates vary significantly between providers.
Add Value: Minor renovations might allow you to increase the monthly rent significantly.
function calculateCashFlow() {
// 1. Get Inputs
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value) || 0;
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var interestRate = parseFloat(document.getElementById('interestRate').value) || 0;
var loanTermYears = parseFloat(document.getElementById('loanTerm').value) || 30;
var closingCosts = parseFloat(document.getElementById('closingCosts').value) || 0;
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var annualTaxes = parseFloat(document.getElementById('annualTaxes').value) || 0;
var annualInsurance = parseFloat(document.getElementById('annualInsurance').value) || 0;
var monthlyHoa = parseFloat(document.getElementById('monthlyHoa').value) || 0;
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value) || 0;
var maintenanceRate = parseFloat(document.getElementById('maintenanceRate').value) || 0;
// 2. Logic & Calculations
// Loan Calculation
var loanAmount = purchasePrice – downPayment;
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTermYears * 12;
var monthlyMortgage = 0;
if (loanAmount > 0 && interestRate > 0) {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
} else if (loanAmount > 0 && interestRate === 0) {
monthlyMortgage = loanAmount / numberOfPayments;
}
// Operating Expenses Calculation
var monthlyTaxes = annualTaxes / 12;
var monthlyInsurance = annualInsurance / 12;
var monthlyVacancy = monthlyRent * (vacancyRate / 100);
var monthlyMaintenance = monthlyRent * (maintenanceRate / 100);
var totalMonthlyExpenses = monthlyTaxes + monthlyInsurance + monthlyHoa + monthlyVacancy + monthlyMaintenance;
// Cash Flow Calculation
var monthlyNOI = monthlyRent – totalMonthlyExpenses;
var monthlyCashFlow = monthlyNOI – monthlyMortgage;
var annualCashFlow = monthlyCashFlow * 12;
// Cash on Cash Return
var totalCashInvested = downPayment + closingCosts;
var cocReturn = 0;
if (totalCashInvested > 0) {
cocReturn = (annualCashFlow / totalCashInvested) * 100;
}
// 3. Display Results
// Format helper
function formatMoney(num) {
return '$' + num.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
}
document.getElementById('resLoanAmount').innerHTML = formatMoney(loanAmount);
document.getElementById('resMortgage').innerHTML = formatMoney(monthlyMortgage);
// Total expenses shown to user usually includes mortgage + ops in some contexts,
// but strictly "Expenses" usually implies Ops. Let's label it clearly in the breakdown.
// For the UI line "Total Monthly Expenses", we will sum Ops + Mortgage for the user's clarity on outflow.
document.getElementById('resExpenses').innerHTML = formatMoney(totalMonthlyExpenses + monthlyMortgage);
document.getElementById('resNOI').innerHTML = formatMoney(monthlyNOI);
var cashFlowEl = document.getElementById('resCashFlow');
cashFlowEl.innerHTML = formatMoney(monthlyCashFlow);
if (monthlyCashFlow >= 0) {
cashFlowEl.className = "rpc-result-value rpc-highlight";
} else {
cashFlowEl.className = "rpc-result-value rpc-highlight-neg";
}
var cocEl = document.getElementById('resCoC');
cocEl.innerHTML = cocReturn.toFixed(2) + '%';
if (cocReturn >= 0) {
cocEl.className = "rpc-result-value rpc-highlight";
} else {
cocEl.className = "rpc-result-value rpc-highlight-neg";
}
// Show result section
document.getElementById('rpcResults').style.display = 'block';
}