Analyze the profitability of your potential real estate investment.
Purchase Information
Income & Expenses
Monthly Mortgage (P&I):$0.00
Monthly Operating Expenses:$0.00
Total Monthly Outflow:$0.00
Net Monthly Cash Flow:$0.00
Cash on Cash Return (Annual):0.00%
Understanding Rental Property Cash Flow
Investing in real estate is a powerful way to build wealth, but the success of an investment property hinges on the numbers. This Rental Property Cash Flow Calculator helps investors determine if a property will generate positive income or become a financial burden.
What is Cash Flow?
Cash flow is the net amount of cash moving into and out of a business. In real estate terms, it is the money left over after all operating expenses and mortgage payments have been deducted from the rental income. Positive cash flow means the property is putting money in your pocket every month, while negative cash flow implies you are losing money to hold the asset.
Key Metrics Explained
Net Operating Income (NOI): This is your total income minus operating expenses (excluding mortgage payments). It measures the profitability of the property itself.
Cash on Cash Return (CoC): This metric compares your annual pre-tax cash flow to the total cash invested (down payment + closing costs). It is a crucial percentage that helps you compare real estate returns against other investment vehicles like stocks or bonds.
Vacancy Rate: No property is occupied 100% of the time. A safe estimate is usually 5-8% to account for turnover periods between tenants.
Maintenance Reserves: Setting aside 5-10% of monthly rent ensures you have funds ready for repairs like leaky faucets, HVAC issues, or roof patches.
How to Improve Cash Flow
If your calculation shows negative or low cash flow, consider these strategies:
Increase Rent: Research local market rates. If your property is undervalued, a small increase can significantly impact the bottom line.
Decrease Expenses: Shop around for cheaper insurance, appeal property tax assessments, or manage the property yourself to save on management fees.
Refinance: If interest rates have dropped since you purchased, refinancing can lower your monthly mortgage payment.
Use this calculator as a preliminary screening tool before making an offer on any rental property.
function calculateCashFlow() {
// 1. Get Inputs
var price = parseFloat(document.getElementById('purchasePrice').value);
var downPercent = parseFloat(document.getElementById('downPayment').value);
var rate = parseFloat(document.getElementById('interestRate').value);
var years = parseFloat(document.getElementById('loanTerm').value);
var closing = parseFloat(document.getElementById('closingCosts').value);
var rent = parseFloat(document.getElementById('rentIncome').value);
var taxYear = parseFloat(document.getElementById('propertyTax').value);
var insYear = parseFloat(document.getElementById('insurance').value);
var hoa = parseFloat(document.getElementById('hoa').value);
var vacancyPercent = parseFloat(document.getElementById('vacancy').value);
var maintPercent = parseFloat(document.getElementById('maintenance').value);
// Validate Inputs
if (isNaN(price) || isNaN(rent) || isNaN(rate) || isNaN(years)) {
alert("Please ensure all fields contain valid numbers.");
return;
}
// 2. Calculate Mortgage (Principal & Interest)
var downAmt = price * (downPercent / 100);
var loanAmt = price – downAmt;
var monthlyRate = rate / 100 / 12;
var numPayments = years * 12;
var mortgage = 0;
if (rate === 0) {
mortgage = loanAmt / numPayments;
} else {
mortgage = loanAmt * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
}
// 3. Calculate Operating Expenses (Monthly)
var taxMonth = taxYear / 12;
var insMonth = insYear / 12;
var vacancyMonth = rent * (vacancyPercent / 100);
var maintMonth = rent * (maintPercent / 100);
// Total Monthly Expenses (Excluding Mortgage)
var operatingExpenses = taxMonth + insMonth + hoa + vacancyMonth + maintMonth;
// Total Outflow
var totalOutflow = operatingExpenses + mortgage;
// 4. Calculate Cash Flow
var monthlyCashFlow = rent – totalOutflow;
var annualCashFlow = monthlyCashFlow * 12;
// 5. Calculate Cash on Cash Return
var totalCashInvested = downAmt + closing;
var cocReturn = 0;
if (totalCashInvested > 0) {
cocReturn = (annualCashFlow / totalCashInvested) * 100;
}
// 6. Display Results
document.getElementById('results').style.display = 'block';
// Format helper
var formatCurrency = function(num) {
return "$" + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
};
document.getElementById('resMortgage').innerHTML = formatCurrency(mortgage);
document.getElementById('resExpenses').innerHTML = formatCurrency(operatingExpenses);
document.getElementById('resTotalOut').innerHTML = formatCurrency(totalOutflow);
var cfEl = document.getElementById('resCashFlow');
cfEl.innerHTML = formatCurrency(monthlyCashFlow);
if (monthlyCashFlow >= 0) {
cfEl.className = "positive";
cfEl.innerHTML = "+" + cfEl.innerHTML;
} else {
cfEl.className = "negative";
}
var cocEl = document.getElementById('resCoc');
cocEl.innerHTML = cocReturn.toFixed(2) + "%";
if (cocReturn >= 0) {
cocEl.className = "positive";
} else {
cocEl.className = "negative";
}
}