Analyzing a rental property investment requires more than just comparing the rent to the mortgage. A professional Rental Property Cash Flow Calculator helps investors determine the viability of a deal by factoring in vacancies, maintenance costs, and capital expenditures. Whether you are a BRRRR investor or looking for a turnkey rental, understanding your numbers is the first rule of real estate investing.
Key Investment Metrics Explained
Cash Flow: The net amount of profit you pocket every month after all operating expenses and mortgage payments are made. Positive cash flow is essential for long-term sustainability.
Cap Rate (Capitalization Rate): Calculated as Net Operating Income (NOI) / Property Asset Value. This metric measures the natural rate of return of the property independent of debt. A higher cap rate generally indicates a better return, though often with higher risk.
Cash on Cash Return (CoC): This measures the annual return on the actual cash you invested (Down payment + Closing costs + Rehab). It is arguably the most important metric for investors using leverage.
How to Use This Calculator
To get the most accurate results, ensure you input realistic numbers for your specific market.
Purchase Price & Financing: Enter the agreed purchase price and your loan terms. Interest rates significantly impact cash flow.
Income & Vacancy: Enter the gross monthly rent. Always account for a vacancy rate (typically 5-8% depending on the area) to ensure you have reserves for turnover periods.
Expenses: Do not underestimate expenses. Include property taxes, insurance, HOA fees, property management fees (usually 10%), and maintenance reserves.
Frequently Asked Questions (FAQ)
What is a good Cash on Cash return?
While this varies by investor goals and market conditions, many real estate investors target a Cash on Cash return of 8% to 12%. Returns above 15% are considered excellent but may require more active management or investing in riskier neighborhoods.
Should I include appreciation in my calculation?
Conservative investors typically calculate deals based on cash flow alone. Appreciation is considered the "icing on the cake." Relying solely on appreciation can be risky if the market corrects, whereas positive cash flow protects you during downturns.
How do I estimate maintenance costs?
A common rule of thumb is to set aside 1% of the property value per year for maintenance, or alternatively, 10-15% of the monthly rental income.
function calculateRentalROI() {
// 1. Get Inputs by ID strictly
var price = parseFloat(document.getElementById('rp_price').value);
var downPercent = parseFloat(document.getElementById('rp_down').value);
var interestRate = parseFloat(document.getElementById('rp_rate').value);
var loanTermYears = parseFloat(document.getElementById('rp_term').value);
var closingCosts = parseFloat(document.getElementById('rp_closing').value);
var monthlyRent = parseFloat(document.getElementById('rp_rent').value);
var vacancyRate = parseFloat(document.getElementById('rp_vacancy').value);
var operatingExp = parseFloat(document.getElementById('rp_expenses').value);
// 2. Validation
if (isNaN(price) || isNaN(downPercent) || isNaN(interestRate) || isNaN(loanTermYears) || isNaN(monthlyRent)) {
alert("Please enter valid numeric values for all fields.");
return;
}
// 3. Core Calculations
var downPaymentAmount = price * (downPercent / 100);
var loanAmount = price – downPaymentAmount;
var totalCashInvested = downPaymentAmount + closingCosts;
// Mortgage Calculation (Principal + Interest)
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTermYears * 12;
var monthlyMortgage = 0;
if (interestRate === 0) {
monthlyMortgage = loanAmount / numberOfPayments;
} else {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
// Income Analysis
var vacancyLoss = monthlyRent * (vacancyRate / 100);
var effectiveGrossIncome = monthlyRent – vacancyLoss;
// Expense Analysis
// Total monthly outflow = Mortgage + Operating Expenses
var totalMonthlyExpenses = monthlyMortgage + operatingExp;
// Net Operating Income (NOI) = Income – Operating Expenses (Excluding Debt Service)
var monthlyNOI = effectiveGrossIncome – operatingExp;
var annualNOI = monthlyNOI * 12;
// Cash Flow
var monthlyCashFlow = effectiveGrossIncome – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// ROI Metrics
var capRate = (annualNOI / price) * 100;
var cashOnCash = (annualCashFlow / totalCashInvested) * 100;
// 4. Update DOM Results
document.getElementById('res_invested').innerHTML = "$" + totalCashInvested.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_mortgage').innerHTML = "$" + monthlyMortgage.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_total_exp').innerHTML = "$" + totalMonthlyExpenses.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
var cfElement = document.getElementById('res_cashflow');
cfElement.innerHTML = "$" + monthlyCashFlow.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Color coding for cash flow
if(monthlyCashFlow >= 0) {
cfElement.style.color = "#27ae60";
} else {
cfElement.style.color = "#c0392b";
}
document.getElementById('res_noi').innerHTML = "$" + annualNOI.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_cap').innerHTML = capRate.toFixed(2) + "%";
var cocElement = document.getElementById('res_coc');
cocElement.innerHTML = cashOnCash.toFixed(2) + "%";
if(cashOnCash >= 0) {
cocElement.style.color = "#2c3e50";
} else {
cocElement.style.color = "#c0392b";
}
// Show results div
document.getElementById('rp_results').style.display = "block";
}