Calculate Cash on Cash Return, Cap Rate, and Monthly Cash Flow.
Purchase Info & Loan
Income & Expenses
Monthly Mortgage (P&I):$0.00
Total Monthly Expenses:$0.00
Net Operating Income (Monthly):$0.00
Monthly Cash Flow:$0.00
Cap Rate:0.00%
Cash on Cash ROI:0.00%
function calculateRentalROI() {
// 1. Get Inputs
var price = parseFloat(document.getElementById('rpPrice').value);
var downPercent = parseFloat(document.getElementById('rpDown').value);
var rate = parseFloat(document.getElementById('rpRate').value);
var term = parseFloat(document.getElementById('rpTerm').value);
var closing = parseFloat(document.getElementById('rpClosing').value);
var rent = parseFloat(document.getElementById('rpRent').value);
var taxYearly = parseFloat(document.getElementById('rpTax').value);
var insYearly = parseFloat(document.getElementById('rpIns').value);
var hoa = parseFloat(document.getElementById('rpHoa').value);
var maintPercent = parseFloat(document.getElementById('rpMaint').value);
// Validation
if (isNaN(price) || isNaN(rent) || isNaN(rate) || isNaN(term)) {
alert("Please enter valid numbers for Price, Rent, Interest Rate, and Term.");
return;
}
// 2. Loan Calculations
var downPayment = price * (downPercent / 100);
var loanAmount = price – downPayment;
var monthlyRate = (rate / 100) / 12;
var totalMonths = term * 12;
var monthlyMortgage = 0;
if (rate === 0) {
monthlyMortgage = loanAmount / totalMonths;
} else {
monthlyMortgage = (loanAmount * monthlyRate) / (1 – Math.pow(1 + monthlyRate, -totalMonths));
}
// 3. Expense Calculations
var monthlyTax = taxYearly / 12;
var monthlyIns = insYearly / 12;
var monthlyMaintVacancy = rent * (maintPercent / 100);
// Operating Expenses (Tax + Ins + HOA + Maint/Vac) – Does NOT include mortgage for Cap Rate
var monthlyOperatingExpenses = monthlyTax + monthlyIns + hoa + monthlyMaintVacancy;
// Total Expenses (Operating + Mortgage)
var totalMonthlyExpenses = monthlyOperatingExpenses + monthlyMortgage;
// 4. Income Metrics
var monthlyNOI = rent – monthlyOperatingExpenses; // Net Operating Income
var monthlyCashFlow = rent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
var annualNOI = monthlyNOI * 12;
// 5. Investment Returns
var totalCashInvested = downPayment + closing;
var cashOnCashROI = 0;
var capRate = 0;
if (totalCashInvested > 0) {
cashOnCashROI = (annualCashFlow / totalCashInvested) * 100;
}
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
// 6. Display Results
document.getElementById('resMortgage').innerText = formatCurrency(monthlyMortgage);
document.getElementById('resExpenses').innerText = formatCurrency(totalMonthlyExpenses);
document.getElementById('resNOI').innerText = formatCurrency(monthlyNOI);
var cfElement = document.getElementById('resCashFlow');
cfElement.innerText = formatCurrency(monthlyCashFlow);
if (monthlyCashFlow >= 0) {
cfElement.className = "rp-highlight";
} else {
cfElement.className = "rp-highlight negative";
}
var roiElement = document.getElementById('resROI');
roiElement.innerText = cashOnCashROI.toFixed(2) + "%";
if (cashOnCashROI >= 0) {
roiElement.className = "rp-highlight";
} else {
roiElement.className = "rp-highlight negative";
}
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + "%";
// Show results
document.getElementById('rpResults').style.display = 'block';
}
function formatCurrency(num) {
return "$" + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}
Understanding Rental Property Analysis
Investing in real estate is one of the most reliable ways to build wealth, but it requires precise calculations to ensure profitability. A rental property is only an asset if it puts money in your pocket. This calculator helps investors determine the viability of a potential investment by analyzing key metrics like Cash Flow, Cap Rate, and Cash on Cash Return.
Key Metrics Explained
1. Monthly Cash Flow:
This is the net amount of money left over each month after all expenses are paid. It is calculated by subtracting total monthly expenses (mortgage, taxes, insurance, maintenance, HOA) from the monthly rental income. Positive cash flow indicates a profitable property, while negative cash flow means the property costs you money to hold.
2. Cash on Cash ROI (Return on Investment):
This metric measures the annual return on the actual cash you invested. Unlike a standard ROI which might look at the total loan value, Cash on Cash focuses on the liquidity you put into the deal (Down Payment + Closing Costs). Formula: (Annual Cash Flow / Total Cash Invested) × 100
3. Cap Rate (Capitalization Rate):
The Cap Rate helps you compare the profitability of different properties regardless of how they are financed. It focuses purely on the property's ability to generate income relative to its price. Formula: (Net Operating Income / Purchase Price) × 100
Estimating Expenses
Many new investors underestimate expenses. Beyond the mortgage, you must account for:
Vacancy Rates: Properties won't be rented 365 days a year. Budgeting 5-10% of rent for vacancy is prudent.
Maintenance & CapEx: Roofs leak and toilets break. Setting aside 10-15% of monthly rent ensures you have funds for repairs.
Property Management: If you hire a manager, expect to pay 8-10% of the monthly rent.
Example Calculation
Imagine purchasing a property for $200,000 with $40,000 down (20%). If the property rents for $1,800/month and your total expenses (mortgage + operations) are $1,500/month, your cash flow is $300/month.
Your annual cash flow is $3,600. Dividing this by your initial $40,000 investment yields a 9% Cash on Cash Return. This allows you to compare real estate returns directly against stock market or bond yields.