function calculateRentalMetrics() {
// Get Inputs
var price = parseFloat(document.getElementById('purchasePrice').value);
var downPerc = parseFloat(document.getElementById('downPayment').value);
var rate = parseFloat(document.getElementById('interestRate').value);
var term = parseFloat(document.getElementById('loanTerm').value);
var closing = parseFloat(document.getElementById('closingCosts').value);
var rent = parseFloat(document.getElementById('monthlyRent').value);
var vacancy = parseFloat(document.getElementById('vacancyRate').value);
var tax = parseFloat(document.getElementById('propertyTax').value);
var insurance = parseFloat(document.getElementById('insurance').value);
var hoa = parseFloat(document.getElementById('hoa').value);
var maintPerc = parseFloat(document.getElementById('maintenance').value);
// Validation
if (isNaN(price) || isNaN(rent)) {
alert("Please enter at least a Purchase Price and Monthly Rent.");
return;
}
// 1. Mortgage Calculation
var downAmount = price * (downPerc / 100);
var loanAmount = price – downAmount;
var monthlyRate = (rate / 100) / 12;
var numPayments = term * 12;
var mortgagePayment = 0;
if (rate > 0) {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
} else {
mortgagePayment = loanAmount / numPayments;
}
// 2. Income Calculation
var vacancyLoss = rent * (vacancy / 100);
var effectiveGrossIncome = rent – vacancyLoss;
// 3. Expense Calculation
var monthlyTax = tax / 12;
var monthlyIns = insurance / 12;
var maintenanceCost = rent * (maintPerc / 100);
var totalOperatingExpenses = monthlyTax + monthlyIns + hoa + maintenanceCost;
// 4. Profit Metrics
var monthlyNOI = effectiveGrossIncome – totalOperatingExpenses;
var annualNOI = monthlyNOI * 12;
var monthlyCashFlow = monthlyNOI – mortgagePayment;
var annualCashFlow = monthlyCashFlow * 12;
var totalCashInvested = downAmount + closing;
var cocROI = 0;
if (totalCashInvested > 0) {
cocROI = (annualCashFlow / totalCashInvested) * 100;
}
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
// Display Results
var cashFlowEl = document.getElementById('resCashFlow');
cashFlowEl.innerText = formatCurrency(monthlyCashFlow);
if (monthlyCashFlow >= 0) {
cashFlowEl.style.color = "#27ae60";
} else {
cashFlowEl.style.color = "#c0392b";
}
document.getElementById('resCoC').innerText = cocROI.toFixed(2) + "%";
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + "%";
document.getElementById('resNOI').innerText = formatCurrency(annualNOI);
document.getElementById('resCashNeeded').innerText = formatCurrency(totalCashInvested);
document.getElementById('resMortgage').innerText = formatCurrency(mortgagePayment);
document.getElementById('resExpenses').innerText = formatCurrency(totalOperatingExpenses);
document.getElementById('results-area').style.display = "block";
}
function formatCurrency(num) {
return "$" + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}
Understanding Rental Property Profitability
Investing in real estate is a powerful way to build wealth, but it requires precise calculations to ensure a property is a viable asset rather than a liability. This Rental Property Cash Flow & ROI Calculator helps investors analyze potential deals by breaking down income, expenses, and financing costs to reveal the true return on investment.
Why Use a Cash Flow Calculator?
Many novice investors make the mistake of only looking at the mortgage payment versus the rent. However, successful real estate investing accounts for "hidden" costs such as vacancy, maintenance, and capital expenditures (CapEx). A property that looks profitable on the surface can quickly turn negative once vacancy rates and repairs are factored in.
Pro Tip: Always estimate a maintenance budget between 5% and 15% of the monthly rent, depending on the age and condition of the property, even if you don't spend it every month.
Key Metrics Explained
1. Cash Flow
Cash Flow is the net amount of money moving into or out of your pocket after all expenses and debt service are paid. Positive cash flow is essential for long-term sustainability. It is calculated as:
Net Operating Income (NOI) – Mortgage Payments = Cash Flow
2. Cash on Cash Return (CoC ROI)
This is arguably the most important metric for investors using leverage (mortgages). It measures the annual return on the actual cash you invested (down payment + closing costs), rather than the total purchase price.
(Annual Cash Flow / Total Cash Invested) x 100 = CoC ROI
A "good" CoC return varies by market, but many investors target 8-12% or higher.
3. Cap Rate (Capitalization Rate)
The Cap Rate measures the property's natural rate of return assuming you paid all cash (no mortgage). It allows you to compare the profitability of different properties regardless of how they are financed.
(Annual NOI / Purchase Price) x 100 = Cap Rate
How to Use This Calculator
Enter Purchase Details: Input the price, your down payment percentage, and loan details. Don't forget closing costs, which typically range from 2-5% of the purchase price.
Input Income: Enter the expected monthly rent. Be realistic and check comparable rents in the area.
Estimate Expenses: This is where deals are made or broken. Include property taxes, insurance, HOA fees, and set aside percentages for vacancy (usually 5-8%) and maintenance.
Analyze: Click "Calculate Returns" to see if the property generates positive cash flow and meets your ROI targets.
Common Investment Pitfalls
Underestimating vacancy and maintenance is the most common error. A property might be vacant for one month a year, equating to an 8.3% vacancy rate. Furthermore, major repairs like a new roof or HVAC system can wipe out years of cash flow if not accounted for in your monthly maintenance reserves.