Investing in real estate is one of the most reliable ways to build wealth, but the key to a successful investment lies in the numbers. This Rental Property Cash Flow Calculator helps investors analyze potential deals by breaking down income, operating expenses, and financing costs to determine the true profitability of an asset.
What is Cash Flow in Real Estate?
Cash flow is the net amount of money moving in and out of a business or investment. For rental properties, it is calculated as:
Cash Flow = Gross Rental Income – Total Expenses
"Total Expenses" includes your mortgage payment (Principal & Interest), taxes, insurance, HOA fees, vacancy reserves, repairs, and property management fees. Positive cash flow means the property is putting money in your pocket every month, while negative cash flow means you are paying to hold the asset.
Key Metrics Explained
Net Operating Income (NOI): This represents the profitability of the property before financing costs are considered. It is calculated by subtracting operating expenses from revenue. It excludes the mortgage payment.
Cash on Cash Return (CoC): This is arguably the most important metric for ROI. It measures the annual cash income earned on the cash invested. Formula: (Annual Pre-Tax Cash Flow / Total Cash Invested) x 100.
Cap Rate (Capitalization Rate): A measure of a property's natural rate of return, independent of debt. It helps compare properties regardless of how they were purchased (cash vs. loan). Formula: (Annual NOI / Purchase Price) x 100.
How to Estimate Expenses Properly
Many new investors fail because they underestimate expenses. When using this calculator, ensure you account for:
Vacancy: Properties are rarely occupied 100% of the time. A standard conservative estimate is 5-8% (about 2-4 weeks per year).
Maintenance & CapEx: Even if a house is new, things break. Setting aside 5-10% of monthly rent for repairs and capital expenditures (like a new roof or HVAC) is prudent.
Property Management: Even if you self-manage now, budgeting 8-10% for management ensures the deal still works if you decide to hire a professional later.
The 1% Rule
A common "rule of thumb" for initial screening is the 1% Rule. It states that the monthly rent should be at least 1% of the purchase price. For example, a $200,000 home should rent for at least $2,000/month. While not a hard rule, properties meeting this threshold are more likely to generate positive cash flow.
function calculateRentalCashFlow() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('rpc_price').value);
var downPercent = parseFloat(document.getElementById('rpc_down_percent').value);
var rate = parseFloat(document.getElementById('rpc_rate').value);
var term = parseFloat(document.getElementById('rpc_term').value);
var closingCosts = parseFloat(document.getElementById('rpc_closing').value);
var rent = parseFloat(document.getElementById('rpc_rent').value);
var hoa = parseFloat(document.getElementById('rpc_hoa').value);
var annualTax = parseFloat(document.getElementById('rpc_tax').value);
var annualInsurance = parseFloat(document.getElementById('rpc_insurance').value);
var maintPercent = parseFloat(document.getElementById('rpc_maintenance').value);
var vacancyPercent = parseFloat(document.getElementById('rpc_vacancy').value);
var managementPercent = parseFloat(document.getElementById('rpc_management').value);
// 2. Validation
var errorDiv = document.getElementById('rpc_error');
if (isNaN(price) || isNaN(downPercent) || isNaN(rate) || isNaN(term) || isNaN(rent)) {
errorDiv.style.display = 'block';
document.getElementById('rpc_results').style.display = 'none';
return;
}
errorDiv.style.display = 'none';
// 3. Financing Calculations
var downPaymentAmount = price * (downPercent / 100);
var loanAmount = price – downPaymentAmount;
var monthlyRate = (rate / 100) / 12;
var numberOfPayments = term * 12;
// Mortgage Calculation (Principal + Interest)
var monthlyMortgage = 0;
if (rate > 0) {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
} else {
monthlyMortgage = loanAmount / numberOfPayments;
}
// 4. Expense Calculations (Monthly)
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
var monthlyVacancy = rent * (vacancyPercent / 100);
var monthlyMaintenance = rent * (maintPercent / 100);
var monthlyManagement = rent * (managementPercent / 100);
// Total Operating Expenses (Excluding Mortgage)
var totalOperatingExpenses = monthlyTax + monthlyInsurance + hoa + monthlyVacancy + monthlyMaintenance + monthlyManagement;
// Total Cash Outflow
var totalOutflow = totalOperatingExpenses + monthlyMortgage;
// 5. Profitability Metrics
var monthlyNOI = rent – totalOperatingExpenses;
var monthlyCashFlow = rent – totalOutflow;
var annualCashFlow = monthlyCashFlow * 12;
var annualNOI = monthlyNOI * 12;
var totalCashInvested = downPaymentAmount + closingCosts;
var cashOnCashReturn = 0;
if (totalCashInvested > 0) {
cashOnCashReturn = (annualCashFlow / totalCashInvested) * 100;
}
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
// 6. Display Results
document.getElementById('rpc_results').style.display = 'block';
// Format Currency Helper
function fmtMoney(num) {
return '$' + num.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
}
function fmtPercent(num) {
return num.toFixed(2) + '%';
}
document.getElementById('res_cash_flow').innerText = fmtMoney(monthlyCashFlow);
document.getElementById('res_coc_return').innerText = fmtPercent(cashOnCashReturn);
document.getElementById('res_cap_rate').innerText = fmtPercent(capRate);
document.getElementById('res_noi').innerText = fmtMoney(monthlyNOI);
document.getElementById('res_mortgage').innerText = fmtMoney(monthlyMortgage);
document.getElementById('res_expenses').innerText = fmtMoney(totalOperatingExpenses);
// Dynamic styling for positive/negative cash flow
var cfElement = document.getElementById('res_cash_flow');
if(monthlyCashFlow >= 0) {
cfElement.style.color = '#27ae60';
} else {
cfElement.style.color = '#c0392b';
}
}