Investing in real estate is one of the most reliable ways to build wealth, but success hinges on the numbers. This Rental Property Cash Flow Calculator is designed to help investors analyze the potential profitability of a residential investment property before signing the dotted line.
What is Cash Flow?
Cash flow is the net amount of money moving into and out of your rental business. Positive cash flow occurs when your property's Gross Rental Income exceeds your Total Expenses (including the mortgage, taxes, insurance, and maintenance reserves). Achieving positive cash flow ensures the property pays for itself and provides you with passive income.
Key Metrics Explained
Net Operating Income (NOI): This is your annual income minus operating expenses, excluding mortgage payments. It measures the raw profitability of the asset itself.
Cash on Cash Return (CoC): This metric compares your annual pre-tax cash flow to the total cash invested (Down Payment + Closing Costs). It tells you how hard your actual money is working for you.
Cap Rate: The ratio of Net Operating Income to the property's asset value. It helps compare the profitability of different properties regardless of how they are financed.
Hidden Expenses to Watch For
Many new investors fail because they underestimate expenses. This calculator includes fields for:
Vacancy Rate: Properties don't stay rented 365 days a year. A 5-8% vacancy allowance is standard industry practice.
Maintenance & Repairs: Roofs leak and toilets break. Setting aside 5-10% of monthly rent for repairs is crucial for long-term sustainability.
HOA Fees: If purchasing a condo or in a managed community, these monthly fees can significantly eat into your margins.
The 1% Rule
A common rule of thumb in real estate is the "1% Rule," which suggests that the monthly rent should be at least 1% of the purchase price. While fewer properties meet this criteria in high-cost markets today, it remains a useful quick-filter for identifying potentially cash-flow-positive deals.
function calculateRental() {
// Get Input Values
var price = parseFloat(document.getElementById('rpPrice').value);
var downPercent = parseFloat(document.getElementById('rpDown').value);
var rate = parseFloat(document.getElementById('rpRate').value);
var years = parseFloat(document.getElementById('rpTerm').value);
var rent = parseFloat(document.getElementById('rpRent').value);
var taxYear = parseFloat(document.getElementById('rpTax').value);
var insYear = parseFloat(document.getElementById('rpIns').value);
var hoa = parseFloat(document.getElementById('rpHoa').value);
var vacancyRate = parseFloat(document.getElementById('rpVacancy').value);
var maintRate = parseFloat(document.getElementById('rpMaint').value);
// Validation
if (isNaN(price) || isNaN(rent) || isNaN(rate) || isNaN(years)) {
alert("Please enter valid numbers for all fields.");
return;
}
// 1. Calculate Mortgage (Principal & Interest)
var downAmount = price * (downPercent / 100);
var loanAmount = price – downAmount;
var monthlyRate = rate / 100 / 12;
var totalPayments = years * 12;
var mortgagePayment = 0;
if (rate > 0) {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
} else {
mortgagePayment = loanAmount / totalPayments;
}
// 2. Calculate Monthly Operating Expenses
var monthlyTax = taxYear / 12;
var monthlyIns = insYear / 12;
var monthlyVacancy = rent * (vacancyRate / 100);
var monthlyMaint = rent * (maintRate / 100);
var operatingExpenses = monthlyTax + monthlyIns + hoa + monthlyVacancy + monthlyMaint;
var totalMonthlyExpenses = operatingExpenses + mortgagePayment;
// 3. Calculate Metrics
var monthlyCashFlow = rent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// NOI (Annual) = (Rent – Operating Expenses) * 12 — Excludes Debt Service
var annualNOI = (rent – operatingExpenses) * 12;
// Cash on Cash Return = Annual Cash Flow / Total Cash Invested (Down Payment)
// Note: For simplicity, we are using Down Payment as Total Cash Invested.
// A more advanced calc would add closing costs (~3% of price).
var cocReturn = 0;
if (downAmount > 0) {
cocReturn = (annualCashFlow / downAmount) * 100;
}
// Cap Rate = Annual NOI / Price
var capRate = (annualNOI / price) * 100;
// Display Results
document.getElementById('resMortgage').innerText = formatCurrency(mortgagePayment);
document.getElementById('resExpenses').innerText = formatCurrency(totalMonthlyExpenses); // Includes P&I + Ops
document.getElementById('resNOI').innerText = formatCurrency(annualNOI);
var cfElement = document.getElementById('resCashFlow');
cfElement.innerText = formatCurrency(monthlyCashFlow);
if (monthlyCashFlow >= 0) {
cfElement.className = "rp-result-value rp-highlight";
cfElement.style.color = "#28a745";
} else {
cfElement.className = "rp-result-value rp-negative";
cfElement.style.color = "#dc3545";
}
document.getElementById('resCOC').innerText = cocReturn.toFixed(2) + "%";
document.getElementById('resCap').innerText = capRate.toFixed(2) + "%";
// Show result box
document.getElementById('rpResults').style.display = 'block';
}
function formatCurrency(num) {
return "$" + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}