Rental Property Cash-on-Cash Return Calculator
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Total Cash Invested
$0.00
Loan Amount
$0.00
Monthly Mortgage (P&I)
$0.00
Total Monthly Costs
$0.00
Monthly Cash Flow
$0.00
Cash on Cash Return
0.00%
Cap Rate
0.00%
Understanding Cash-on-Cash Return in Real Estate
For real estate investors, the Cash-on-Cash (CoC) Return is arguably the most important metric for evaluating the performance of a rental property. Unlike a simple ROI calculation, CoC measures the annual pre-tax cash flow relative to the actual amount of cash you invested upfront (the down payment plus closing costs).
This metric is essential because it tells you exactly how hard your money is working. For example, if you put $50,000 down to buy a property and it generates $5,000 in net positive cash flow per year, your Cash-on-Cash return is 10%.
How This Calculator Works
To get an accurate assessment of your potential rental investment, input the following data:
- Purchase Price & Down Payment: Determines your loan amount and initial equity.
- Closing Costs: Don't forget these! They are part of your initial cash investment (denominator in the CoC formula).
- Operating Expenses: Be realistic here. Include property taxes, insurance, HOA fees, maintenance reserves, and property management fees if applicable.
Interpreting the Results
- Positive Cash Flow: Indicates the property generates income after all debts and expenses are paid.
- Cash on Cash Return: A common benchmark for a "good" return varies by market, but many investors look for 8-12% or higher.
- Cap Rate: This measures the property's natural rate of return assuming it was bought with all cash. It helps compare the property's value against others in the market, independent of financing.
Note: This calculator assumes a fixed-rate mortgage and does not account for property appreciation or tax benefits like depreciation, which can further enhance total ROI.
function calculateRentalROI() {
// 1. Get Inputs
var price = parseFloat(document.getElementById('purchasePrice').value);
var downPercent = parseFloat(document.getElementById('downPaymentPercent').value);
var closingCosts = parseFloat(document.getElementById('closingCosts').value);
var interestRate = parseFloat(document.getElementById('interestRate').value);
var termYears = parseFloat(document.getElementById('loanTerm').value);
var rent = parseFloat(document.getElementById('monthlyRent').value);
var expenses = parseFloat(document.getElementById('monthlyExpenses').value);
// 2. Validation
if (isNaN(price) || isNaN(downPercent) || isNaN(closingCosts) || isNaN(interestRate) || isNaN(termYears) || isNaN(rent) || isNaN(expenses)) {
alert("Please enter valid numbers in all fields.");
return;
}
// 3. Logic Calculations
// Initial Cash Investment
var downPaymentAmount = price * (downPercent / 100);
var totalCashInvested = downPaymentAmount + closingCosts;
// Mortgage Calculation
var loanAmount = price – downPaymentAmount;
var monthlyRate = (interestRate / 100) / 12;
var totalPayments = termYears * 12;
var monthlyMortgage = 0;
if (interestRate === 0) {
monthlyMortgage = loanAmount / totalPayments;
} else {
// Standard Amortization Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
}
// Cash Flow Calculations
var totalMonthlyCosts = monthlyMortgage + expenses;
var monthlyCashFlow = rent – totalMonthlyCosts;
var annualCashFlow = monthlyCashFlow * 12;
// Return Metrics
var cocReturn = 0;
if (totalCashInvested > 0) {
cocReturn = (annualCashFlow / totalCashInvested) * 100;
}
// Cap Rate Calculation: (Net Operating Income / Current Market Value)
// NOI = (Annual Rent – Annual Operating Expenses) -> Excludes Mortgage
var annualNOI = (rent – expenses) * 12;
var capRate = (annualNOI / price) * 100;
// 4. Output Display
// Formatting helper
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
document.getElementById('resTotalInvestment').innerText = formatter.format(totalCashInvested);
document.getElementById('resLoanAmount').innerText = formatter.format(loanAmount);
document.getElementById('resMortgage').innerText = formatter.format(monthlyMortgage);
document.getElementById('resTotalCosts').innerText = formatter.format(totalMonthlyCosts);
var cfElement = document.getElementById('resMonthlyCashFlow');
cfElement.innerText = formatter.format(monthlyCashFlow);
if(monthlyCashFlow >= 0) {
cfElement.style.color = "#27ae60";
} else {
cfElement.style.color = "#c0392b";
}
document.getElementById('resCoC').innerText = cocReturn.toFixed(2) + "%";
// Visual cue for negative CoC
var cocElement = document.getElementById('resCoC');
if(cocReturn < 0) {
cocElement.style.color = "#c0392b";
} else {
cocElement.style.color = "#27ae60";
}
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + "%";
}