Use this professional rental property calculator to determine the potential profitability of a real estate investment. Enter the property details below to calculate your Net Cash Flow, Cap Rate, and Cash-on-Cash Return.
Monthly Mortgage Payment (P&I):$0.00
Total Monthly Operating Expenses:$0.00
Net Monthly Cash Flow:$0.00
Capitalization Rate (Cap Rate):0.00%
Cash-on-Cash Return:0.00%
function calculateRentalROI() {
var price = parseFloat(document.getElementById('propValue').value);
var downPercent = parseFloat(document.getElementById('downPayment').value);
var rate = parseFloat(document.getElementById('intRate').value);
var term = parseFloat(document.getElementById('loanTerm').value);
var rent = parseFloat(document.getElementById('monthlyRent').value);
var expenses = parseFloat(document.getElementById('monthlyExp').value);
if (isNaN(price) || isNaN(rent)) {
alert("Please enter valid property price and monthly rent.");
return;
}
// Calculations
var downPaymentAmt = price * (downPercent / 100);
var loanAmount = price – downPaymentAmt;
var monthlyInt = (rate / 100) / 12;
var numPayments = term * 12;
var mortgage = 0;
if (rate > 0) {
mortgage = loanAmount * (monthlyInt * Math.pow(1 + monthlyInt, numPayments)) / (Math.pow(1 + monthlyInt, numPayments) – 1);
} else {
mortgage = loanAmount / numPayments;
}
var totalMonthlyOutgo = mortgage + expenses;
var monthlyCashFlow = rent – totalMonthlyOutgo;
// Cap Rate = Annual NOI / Price
// NOI = Annual Rent – Annual Operating Expenses (excluding mortgage)
var annualRent = rent * 12;
var annualOperatingExp = expenses * 12;
var noi = annualRent – annualOperatingExp;
var capRate = (noi / price) * 100;
// Cash on Cash = Annual Cash Flow / Initial Cash Invested
var annualCashFlow = monthlyCashFlow * 12;
var cocReturn = (annualCashFlow / downPaymentAmt) * 100;
// Display results
document.getElementById('resMortgage').innerText = '$' + mortgage.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resTotalExp').innerText = '$' + totalMonthlyOutgo.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resCashFlow').innerText = '$' + monthlyCashFlow.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + '%';
document.getElementById('resCoC').innerText = cocReturn.toFixed(2) + '%';
document.getElementById('results-box').style.display = 'block';
}
Understanding Rental Property ROI Metrics
When evaluating a real estate investment, simply looking at the monthly rent isn't enough. Professional investors use specific financial ratios to compare different properties. This calculator provides the three most critical metrics:
1. Net Monthly Cash Flow
This is the amount of money left in your pocket at the end of every month after all bills are paid. A positive cash flow is essential for long-term sustainability. If this number is negative, you are "feeding" the property every month, which significantly increases your risk profile.
2. Capitalization Rate (Cap Rate)
The Cap Rate is used to estimate the investor's potential return on their investment, assuming the property was purchased in cash. It is calculated by dividing the Net Operating Income (NOI) by the purchase price. Cap rates allow you to compare the intrinsic value and income potential of properties across different markets regardless of how they are financed.
3. Cash-on-Cash Return (CoC)
For most investors using leverage (a mortgage), the Cash-on-Cash return is the most important number. It measures the annual return you receive on the actual cash you invested (your down payment and closing costs). In the example above, if you put down $70,000 on a $350,000 house and generate $7,000 in annual profit, your CoC return is 10%.
Example ROI Calculation
Imagine you buy a duplex for $400,000 with 25% down ($100,000). Your mortgage at 6% interest is approximately $1,800/month. You pay $700/month in taxes, insurance, and maintenance. If the total rent from both units is $3,500:
Gross Income: $3,500
Total Expenses: $2,500 ($1,800 + $700)
Net Monthly Cash Flow: $1,000
Annual Cash Flow: $12,000
Cash-on-Cash Return: 12% ($12,000 / $100,000)
Disclaimer: This calculator is for informational purposes only. Real estate investments involve risk, and you should consult with a financial advisor or tax professional before making any purchase.