function calculateRentalCashFlow() {
// 1. Get Inputs
var price = parseFloat(document.getElementById('purchasePrice').value) || 0;
var downPercent = parseFloat(document.getElementById('downPaymentPercent').value) || 0;
var interestRate = parseFloat(document.getElementById('interestRate').value) || 0;
var years = parseFloat(document.getElementById('loanTerm').value) || 0;
var rent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value) || 0;
var taxAnnual = parseFloat(document.getElementById('propertyTax').value) || 0;
var insuranceAnnual = parseFloat(document.getElementById('insurance').value) || 0;
var mgmtFeePercent = parseFloat(document.getElementById('mgmtFee').value) || 0;
var maintenanceMonthly = parseFloat(document.getElementById('maintenance').value) || 0;
// 2. Calculate Mortgage (Principal & Interest)
var downPaymentAmount = price * (downPercent / 100);
var loanAmount = price – downPaymentAmount;
var monthlyRate = (interestRate / 100) / 12;
var numPayments = years * 12;
var monthlyMortgage = 0;
if (interestRate === 0) {
monthlyMortgage = loanAmount / numPayments;
} else {
monthlyMortgage = (loanAmount * monthlyRate) / (1 – Math.pow(1 + monthlyRate, -numPayments));
}
// 3. Calculate Expenses
var monthlyTax = taxAnnual / 12;
var monthlyInsurance = insuranceAnnual / 12;
var vacancyCost = rent * (vacancyRate / 100);
var mgmtCost = rent * (mgmtFeePercent / 100);
var totalOperatingExpenses = monthlyTax + monthlyInsurance + vacancyCost + mgmtCost + maintenanceMonthly;
var totalExpenses = totalOperatingExpenses + monthlyMortgage;
// 4. Calculate Metrics
var monthlyCashFlow = rent – totalExpenses;
var annualCashFlow = monthlyCashFlow * 12;
var annualNOI = (rent * 12) – (totalOperatingExpenses * 12); // NOI excludes mortgage
// Total Cash Invested (assuming 3% closing costs for estimation, plus downpayment)
var closingCosts = price * 0.03;
var totalCashInvested = downPaymentAmount + closingCosts;
var cashOnCash = (totalCashInvested > 0) ? (annualCashFlow / totalCashInvested) * 100 : 0;
var capRate = (price > 0) ? (annualNOI / price) * 100 : 0;
// 5. Update UI
// Helper for currency formatting
var fmt = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
document.getElementById('resGrossIncome').innerText = fmt.format(rent);
document.getElementById('resOpEx').innerText = fmt.format(totalOperatingExpenses);
document.getElementById('resMortgage').innerText = fmt.format(monthlyMortgage);
document.getElementById('resNOI').innerText = fmt.format(annualNOI / 12); // Monthly NOI shown
var cashFlowEl = document.getElementById('resCashFlow');
cashFlowEl.innerText = fmt.format(monthlyCashFlow);
if (monthlyCashFlow < 0) {
cashFlowEl.classList.add('rp-negative');
cashFlowEl.classList.remove('rp-highlight');
} else {
cashFlowEl.classList.remove('rp-negative');
cashFlowEl.classList.add('rp-highlight');
}
document.getElementById('resCoC').innerText = cashOnCash.toFixed(2) + "%";
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + "%";
// Show results
document.getElementById('resultsArea').style.display = 'block';
}
Understanding Rental Property Cash Flow
Investing in real estate is a powerful vehicle for wealth generation, but success hinges on the math. The Rental Property Cash Flow Calculator helps investors determine if a potential property is a viable asset or a financial liability. Cash flow is the net amount of money moving in and out of a business, or in this case, your rental property.
How to Calculate Cash Flow
The formula for rental property cash flow is straightforward but requires accuracy regarding expenses. It is calculated as:
Debt Service: Your monthly mortgage payment (Principal and Interest).
Key Metrics Explained
This calculator provides several critical metrics to evaluate your deal:
NOI (Net Operating Income): This is your profitability before the mortgage is paid. It is calculated as Income minus Operating Expenses. Banks use this to determine if the property generates enough income to cover the loan.
Cash on Cash Return: This measures the return on the actual cash you invested (Down payment + Closing costs). A return of 8-12% is often considered a solid benchmark for rental investors.
Cap Rate (Capitalization Rate): This metric allows you to compare the profitability of properties regardless of how they are financed. It is calculated as Annual NOI divided by the Purchase Price.
Why You Must Account for Vacancy and Repairs
Novice investors often make the mistake of assuming 100% occupancy and zero repairs. This calculator includes fields for Vacancy Rate and Maintenance/CapEx to provide a realistic projection.
A standard vacancy rate to plan for is 5% to 8% (representing roughly 2-4 weeks vacant per year). For maintenance, setting aside 10-15% of the rent is prudent to cover eventual replacements of roofs, HVAC systems, and general wear and tear.
Using the Calculator for Decision Making
Input your purchase price and loan details first. Then, estimate your rental income based on comparable properties in the area. Be conservative with your expense estimates. If the Monthly Cash Flow result is positive, the property pays for itself and puts money in your pocket. If it is negative, you will be subsidizing the property monthly, banking solely on appreciation, which is a riskier strategy.