How to Calculate Interest Yield Rate

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Rental Property ROI & Cash Flow Calculator

Purchase & Loan Details
Income & Expenses
Variable Expenses

Analysis Results

Monthly Mortgage (P&I): $0.00
Total Monthly Expenses: $0.00
Net Operating Income (NOI) / Mo: $0.00
Monthly Cash Flow: $0.00
Cash on Cash Return (CoC): 0.00%
Cap Rate: 0.00%

Understanding Rental Property ROI

Investing in real estate requires more than just guessing; it requires precise mathematical analysis. This Rental Property Calculator helps investors determine if a property is a viable investment by calculating key performance indicators like Cash Flow, Cap Rate, and Cash on Cash Return.

Key Metrics Explained

  • Cash Flow: This is your profit after all expenses (mortgage, taxes, insurance, maintenance, vacancy) are paid. Positive cash flow is essential for a sustainable rental portfolio.
  • Cash on Cash Return (CoC): This metric measures the annual return on the actual cash you invested (down payment + closing costs). It is one of the most important metrics for leverage-based investing.
  • Cap Rate (Capitalization Rate): Cap rate measures the property's natural rate of return without considering the mortgage. It is calculated as Net Operating Income (NOI) divided by the purchase price.
  • Net Operating Income (NOI): The total income generated by the property minus all operating expenses, excluding the mortgage payments.

How to Improve Your ROI

If the numbers from the calculator aren't meeting your investment goals, consider these strategies:

  1. Negotiate Price: Lowering the purchase price instantly boosts your Cap Rate and equity.
  2. Increase Rent: Small increases in monthly rent significantly impact the bottom line.
  3. Reduce Expenses: Shop around for cheaper insurance or manage the property yourself to save on management fees.
  4. Value Add: Renovations that force appreciation can allow you to refinance later and pull your initial cash out.
function calculateRentalROI() { // Get Input Values var price = parseFloat(document.getElementById('rcPrice').value) || 0; var downPercent = parseFloat(document.getElementById('rcDown').value) || 0; var rate = parseFloat(document.getElementById('rcRate').value) || 0; var term = parseFloat(document.getElementById('rcTerm').value) || 0; var closingCosts = parseFloat(document.getElementById('rcClosing').value) || 0; var rent = parseFloat(document.getElementById('rcRent').value) || 0; var taxYearly = parseFloat(document.getElementById('rcTax').value) || 0; var insYearly = parseFloat(document.getElementById('rcIns').value) || 0; var hoaMonthly = parseFloat(document.getElementById('rcHOA').value) || 0; var vacancyPercent = parseFloat(document.getElementById('rcVacancy').value) || 0; var maintPercent = parseFloat(document.getElementById('rcMaint').value) || 0; var mgmtPercent = parseFloat(document.getElementById('rcMgmt').value) || 0; // Loan Calculations var downPaymentAmount = price * (downPercent / 100); var loanAmount = price – downPaymentAmount; var monthlyRate = (rate / 100) / 12; var totalMonths = term * 12; var mortgagePayment = 0; if (rate > 0) { mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalMonths)) / (Math.pow(1 + monthlyRate, totalMonths) – 1); } else { mortgagePayment = loanAmount / totalMonths; } // Expense Calculations var vacancyCost = rent * (vacancyPercent / 100); var maintCost = rent * (maintPercent / 100); var mgmtCost = rent * (mgmtPercent / 100); var taxMonthly = taxYearly / 12; var insMonthly = insYearly / 12; var operatingExpenses = taxMonthly + insMonthly + hoaMonthly + vacancyCost + maintCost + mgmtCost; var totalExpenses = operatingExpenses + mortgagePayment; // Income Metrics var netOperatingIncome = rent – operatingExpenses; // NOI excludes debt service var monthlyCashFlow = netOperatingIncome – mortgagePayment; var annualCashFlow = monthlyCashFlow * 12; var annualNOI = netOperatingIncome * 12; // ROI Metrics var totalCashInvested = downPaymentAmount + closingCosts; var cashOnCash = 0; if (totalCashInvested > 0) { cashOnCash = (annualCashFlow / totalCashInvested) * 100; } var capRate = 0; if (price > 0) { capRate = (annualNOI / price) * 100; } // Display Results document.getElementById('resMortgage').innerText = "$" + mortgagePayment.toFixed(2); document.getElementById('resExpenses').innerText = "$" + totalExpenses.toFixed(2); document.getElementById('resNOI').innerText = "$" + netOperatingIncome.toFixed(2); var cfElement = document.getElementById('resCashFlow'); cfElement.innerText = "$" + monthlyCashFlow.toFixed(2); if(monthlyCashFlow >= 0) { cfElement.className = "rc-val rc-positive"; } else { cfElement.className = "rc-val rc-negative"; } var cocElement = document.getElementById('resCOC'); cocElement.innerText = cashOnCash.toFixed(2) + "%"; if(cashOnCash >= 0) { cocElement.className = "rc-val rc-positive"; } else { cocElement.className = "rc-val rc-negative"; } document.getElementById('resCap').innerText = capRate.toFixed(2) + "%"; document.getElementById('rcResults').style.display = 'block'; }

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