function calculateRentalROI() {
// Get inputs using var as requested
var price = parseFloat(document.getElementById('propPrice').value);
var down = parseFloat(document.getElementById('downPayment').value);
var rate = parseFloat(document.getElementById('interestRate').value);
var years = parseFloat(document.getElementById('loanTerm').value);
var rent = parseFloat(document.getElementById('monthlyRent').value);
var opex = parseFloat(document.getElementById('monthlyExpenses').value);
// Validation
if (isNaN(price) || isNaN(down) || isNaN(rate) || isNaN(years) || isNaN(rent) || isNaN(opex)) {
alert("Please fill in all fields with valid numbers.");
return;
}
// Loan Calculation
var principal = price – down;
var monthlyRate = (rate / 100) / 12;
var numPayments = years * 12;
var mortgagePayment = 0;
if (rate === 0) {
mortgagePayment = principal / numPayments;
} else {
mortgagePayment = (principal * monthlyRate) / (1 – Math.pow(1 + monthlyRate, -numPayments));
}
// Cash Flow Calculation
var totalMonthlyExpenses = mortgagePayment + opex;
var monthlyCashFlow = rent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// ROI (Cash on Cash)
// Assumes closing costs are included in down payment or negligible for this simple calc
// Avoid division by zero
var cocReturn = 0;
if (down > 0) {
cocReturn = (annualCashFlow / down) * 100;
}
// Display Results
var resultDiv = document.getElementById('resultsArea');
resultDiv.style.display = 'block';
document.getElementById('resMortgage').innerText = "$" + mortgagePayment.toFixed(2);
document.getElementById('resTotalExp').innerText = "$" + totalMonthlyExpenses.toFixed(2);
var flowEl = document.getElementById('resCashFlow');
flowEl.innerText = (monthlyCashFlow >= 0 ? "$" : "-$") + Math.abs(monthlyCashFlow).toFixed(2);
// Style changes for positive/negative cash flow
if (monthlyCashFlow = 0 ? "$" : "-$") + Math.abs(annualCashFlow).toFixed(2);
document.getElementById('resCoC').innerText = cocReturn.toFixed(2) + "%";
}
Understanding Rental Property Cash Flow
Investing in real estate is one of the most reliable ways to build wealth, but simply buying a property doesn't guarantee profit. The key metric that successful investors track is Cash Flow. This Rental Property Cash Flow Calculator helps you analyze whether a potential investment property will put money in your pocket every month or become a financial liability.
How is Rental Cash Flow Calculated?
Cash flow is essentially the income left over after all expenses are paid. The formula used in this calculator is:
Gross Income: Your projected monthly rent.
Operating Expenses: Property taxes, insurance, HOA fees, maintenance reserves, and vacancy allowances.
Debt Service: Your monthly mortgage payment (principal and interest).
Net Cash Flow = Rental Income – (Operating Expenses + Mortgage Payment)
What is Cash-on-Cash Return?
While cash flow tells you the dollar amount you earn, Cash-on-Cash (CoC) Return tells you how hard your money is working. It measures the annual return on the actual cash you invested (down payment + closing costs), rather than the total loan amount.
For example, if you invest $50,000 cash to buy a property and it generates $5,000 in positive cash flow per year, your Cash-on-Cash return is 10%. This allows you to compare real estate investments directly against stocks, bonds, or other savings accounts.
Key Inputs Explained
Purchase Price: The total agreed-upon price of the property.
Down Payment: The initial cash you are paying upfront. A higher down payment reduces your mortgage payment and increases cash flow.
Monthly Expenses: Do not underestimate this! Be sure to include:
Property Taxes (check local records)
Landlord Insurance
Property Management Fees (typically 8-10% of rent)
Maintenance and CapEx reserves (budget 5-10% of rent)
What is a "Good" Cash Flow?
A "good" return varies by investor and market strategy. However, many seasoned investors look for a minimum of $100 to $200 per door in net monthly profit after all expenses. For Cash-on-Cash return, a target of 8% to 12% is often considered a solid benchmark in many markets, outperforming the historical average of the stock market.