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Rental Property Cash on Cash Return Calculator

Rental Property Cash on Cash Return Calculator

Purchase & Financing

30 Years 20 Years 15 Years 10 Years

Income & Expenses

Cash on Cash Return
0.00%
Annual Cash Flow / Total Cash Invested
Monthly Cash Flow
$0.00
Income minus all expenses & debt
Cap Rate
0.00%
NOI / Purchase Price

Detailed Financial Breakdown

Net Operating Income (Annual) $0.00
Annual Mortgage Payments $0.00
Total Annual Expenses (Ops + Vacancy) $0.00
Total Cash Invested $0.00
function calculateRentalROI() { // 1. Get Values var purchasePrice = parseFloat(document.getElementById('purchasePrice').value) || 0; var downPayment = parseFloat(document.getElementById('downPayment').value) || 0; var closingCosts = parseFloat(document.getElementById('closingCosts').value) || 0; var interestRate = parseFloat(document.getElementById('interestRate').value) || 0; var loanTerm = parseFloat(document.getElementById('loanTerm').value) || 30; var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0; var annualTaxes = parseFloat(document.getElementById('annualTaxes').value) || 0; var annualInsurance = parseFloat(document.getElementById('annualInsurance').value) || 0; var monthlyMaintenance = parseFloat(document.getElementById('monthlyMaintenance').value) || 0; var vacancyRate = parseFloat(document.getElementById('vacancyRate').value) || 0; // 2. Loan Calculations var loanAmount = purchasePrice – downPayment; var monthlyRate = (interestRate / 100) / 12; var numberOfPayments = loanTerm * 12; var monthlyMortgage = 0; if (loanAmount > 0 && interestRate > 0) { monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1); } else if (loanAmount > 0 && interestRate === 0) { monthlyMortgage = loanAmount / numberOfPayments; } // 3. Operating Expenses Calculations var annualMaintenance = monthlyMaintenance * 12; var vacancyAmountYearly = (monthlyRent * 12) * (vacancyRate / 100); var totalOperatingExpenses = annualTaxes + annualInsurance + annualMaintenance + vacancyAmountYearly; // 4. Income Calculations var grossAnnualIncome = monthlyRent * 12; var netOperatingIncome = grossAnnualIncome – totalOperatingExpenses; // 5. Cash Flow Calculations var annualDebtService = monthlyMortgage * 12; var annualCashFlow = netOperatingIncome – annualDebtService; var monthlyCashFlow = annualCashFlow / 12; // 6. Return Calculations var totalCashInvested = downPayment + closingCosts; var cashOnCashReturn = 0; if (totalCashInvested > 0) { cashOnCashReturn = (annualCashFlow / totalCashInvested) * 100; } var capRate = 0; if (purchasePrice > 0) { capRate = (netOperatingIncome / purchasePrice) * 100; } // 7. Display Results document.getElementById('resultsArea').style.display = 'block'; // Helper for currency formatting var formatter = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD', }); document.getElementById('resultCoC').innerHTML = cashOnCashReturn.toFixed(2) + "%"; document.getElementById('resultMonthlyCashflow').innerHTML = formatter.format(monthlyCashFlow); document.getElementById('resultCapRate').innerHTML = capRate.toFixed(2) + "%"; document.getElementById('resultNOI').innerHTML = formatter.format(netOperatingIncome); document.getElementById('resultDebtService').innerHTML = formatter.format(annualDebtService); document.getElementById('resultTotalExpenses').innerHTML = formatter.format(totalOperatingExpenses); document.getElementById('resultTotalInvestment').innerHTML = formatter.format(totalCashInvested); // Visual coloring for negative cashflow if (monthlyCashFlow < 0) { document.getElementById('resultMonthlyCashflow').style.color = '#e74c3c'; } else { document.getElementById('resultMonthlyCashflow').style.color = '#2980b9'; } }

Understanding Your Rental Property Returns

Investing in real estate is one of the most reliable ways to build wealth, but not every property is a good deal. To succeed, you need to look beyond the monthly rent check and understand the underlying mathematics of your investment. This Cash on Cash Return Calculator is designed to help investors evaluate the true profitability of a rental property.

What is Cash on Cash Return?

Cash on Cash (CoC) Return is a metric used to calculate the annual cash income earned on the cash you actually invested. Unlike other metrics that might look at the total value of the property, CoC focuses strictly on the money that left your pocket (Down Payment + Closing Costs + Rehab Costs).

Formula:
Cash on Cash Return = (Annual Pre-Tax Cash Flow / Total Cash Invested) × 100

Cash on Cash vs. Cap Rate

Many new investors confuse Cash on Cash return with Capitalization Rate (Cap Rate). While both are important, they serve different purposes:

  • Cap Rate: Measures the return of the property as if you bought it entirely with cash. It is useful for comparing the intrinsic value of different buildings, regardless of financing.
  • Cash on Cash Return: Measures the return on your specific equity. It takes into account your mortgage leverage. Because most investors use loans, CoC is often considered the more realistic metric for actual investment performance.

How to Use This Calculator

To get an accurate result, ensure you have the following data points ready:

  1. Purchase Price & Financing: Enter the agreed price and your loan details. The calculator will automatically determine your mortgage payment.
  2. Initial Cash Outlay: Don't forget closing costs and immediate repair costs. These significantly impact your denominator (Total Cash Invested).
  3. Operating Expenses: Be realistic. Include property taxes, insurance, HOA fees, and a buffer for maintenance and vacancy (typically 5-10%).

What is a "Good" Cash on Cash Return?

There is no single answer, as it depends on the risk profile of the asset and the current economic climate. However, general benchmarks include:

  • 8-12%: Often considered a solid return for residential rentals in stable markets.
  • 15%+: Considered excellent, though often associated with higher-risk properties or those requiring significant "sweat equity" (renovations).
  • Below 5%: In this range, you might be better off investing in the stock market unless the property has high appreciation potential.

Use the tool above to run different scenarios. Adjust the rental income or the purchase price to see how slight changes can drastically affect your bottom line.

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