function calculateRentalCashFlow() {
// Inputs
var price = parseFloat(document.getElementById("rpcPrice").value);
var downPct = parseFloat(document.getElementById("rpcDownPct").value);
var rate = parseFloat(document.getElementById("rpcRate").value);
var term = parseFloat(document.getElementById("rpcTerm").value);
var rent = parseFloat(document.getElementById("rpcRent").value);
var tax = parseFloat(document.getElementById("rpcTax").value) || 0;
var insurance = parseFloat(document.getElementById("rpcInsurance").value) || 0;
var hoa = parseFloat(document.getElementById("rpcHoa").value) || 0;
var maintenance = parseFloat(document.getElementById("rpcMaintenance").value) || 0;
var vacancy = parseFloat(document.getElementById("rpcVacancy").value) || 0;
var errorDiv = document.getElementById("rpcError");
var resultsDiv = document.getElementById("rpcResults");
// Validation
if (isNaN(price) || isNaN(downPct) || isNaN(rate) || isNaN(term) || isNaN(rent)) {
errorDiv.style.display = "block";
resultsDiv.style.display = "none";
return;
}
errorDiv.style.display = "none";
// Calculations
var downPaymentAmount = price * (downPct / 100);
var loanAmount = price – downPaymentAmount;
// Mortgage Calculation: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var monthlyRate = (rate / 100) / 12;
var totalMonths = term * 12;
var monthlyMortgage = 0;
if (rate === 0) {
monthlyMortgage = loanAmount / totalMonths;
} else {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalMonths)) / (Math.pow(1 + monthlyRate, totalMonths) – 1);
}
var totalOperatingExpenses = tax + insurance + hoa + maintenance + vacancy;
var totalOutflow = monthlyMortgage + totalOperatingExpenses;
var monthlyCashFlow = rent – totalOutflow;
var annualCashFlow = monthlyCashFlow * 12;
// NOI = (Rent – Operating Expenses) * 12. Note: Mortgage is not an operating expense for NOI.
var monthlyNOI = rent – totalOperatingExpenses;
var annualNOI = monthlyNOI * 12;
var capRate = (annualNOI / price) * 100;
// Cash on Cash Return = Annual Cash Flow / Total Cash Invested (Down Payment)
// Note: Simplified to assume no closing costs other than down payment for this basic calc.
var cocReturn = 0;
if (downPaymentAmount > 0) {
cocReturn = (annualCashFlow / downPaymentAmount) * 100;
}
// Display Results
document.getElementById("resMortgage").innerText = "$" + monthlyMortgage.toFixed(2);
document.getElementById("resExpenses").innerText = "$" + totalOperatingExpenses.toFixed(2);
document.getElementById("resNOI").innerText = "$" + monthlyNOI.toFixed(2);
document.getElementById("resCapRate").innerText = capRate.toFixed(2) + "%";
document.getElementById("resCoC").innerText = cocReturn.toFixed(2) + "%";
var cashFlowElement = document.getElementById("resCashFlow");
cashFlowElement.innerText = (monthlyCashFlow >= 0 ? "$" : "-$") + Math.abs(monthlyCashFlow).toFixed(2);
if (monthlyCashFlow >= 0) {
cashFlowElement.style.color = "#27ae60";
} else {
cashFlowElement.style.color = "#c0392b";
}
resultsDiv.style.display = "block";
}
Mastering Your Investment with the Rental Property Cash Flow Calculator
Investing in real estate is one of the most proven pathways to wealth generation, but the difference between a successful investment and a financial burden often comes down to one metric: Cash Flow. Our Rental Property Cash Flow Calculator is designed to give investors a clear, immediate picture of the potential profitability of a property.
What is Rental Property Cash Flow?
Rental property cash flow is the net amount of money left over after all expenses related to the property have been paid. This includes your mortgage payment, property taxes, insurance, homeowners association (HOA) fees, and allowances for maintenance and vacancy. Positive cash flow means the property is putting money into your pocket every month, while negative cash flow means you are paying out of pocket to hold the asset.
Calculating this accurately is crucial because it accounts for both the obvious costs (like the mortgage) and the often-overlooked operational costs that can eat into profits.
Key Metrics Explained
This calculator provides several critical financial indicators to help you evaluate a deal:
Monthly Cash Flow: The raw dollar amount of profit per month. This is your passive income.
Cash on Cash Return (CoC): This measures the return on the actual cash you invested (your down payment). It is calculated by dividing the annual cash flow by the total cash invested. A CoC return of 8-12% is often considered a solid benchmark for rental properties.
Cap Rate (Capitalization Rate): This metric evaluates the profitability of a property regardless of how it is financed. It is calculated by dividing the Net Operating Income (NOI) by the purchase price. Cap rates are useful for comparing similar properties in the same market.
Net Operating Income (NOI): The total income generated by the property minus all operating expenses, excluding the mortgage payments.
How to Use This Calculator
To get the most accurate results, ensure you input realistic numbers for every field:
Purchase Information: Enter the price of the home and your loan details. The interest rate significantly impacts your monthly mortgage payment.
Income: Input the expected monthly rent. Research comparable properties ("comps") in the area to validate this number.
Expenses: Be honest about expenses. Don't forget to budget for Maintenance (usually 1% of property value per year or 5-10% of rent) and Vacancy (assume the property will sit empty for one month a year, or ~8% of rent).
Strategies to Improve Cash Flow
If the calculator shows a negative or low cash flow, consider these strategies:
Increase Rent: Can minor renovations allow you to charge a premium?
Lower Expenses: Shop around for cheaper insurance or challenge the property tax assessment.
Adjust Financing: A larger down payment reduces the loan amount and monthly mortgage payment, instantly boosting cash flow.
Buy Better: Negotiate a lower purchase price to improve all return metrics immediately.
Why Cash Flow Matters
While appreciation (the increase in property value over time) is a great bonus, cash flow is what keeps your business sustainable. It provides the liquidity needed to handle repairs, vacancies, and eventually, to purchase your next investment property. Use this calculator as a first step in your due diligence process to ensure your next real estate deal is a winner.