Investing in real estate is one of the most reliable ways to build wealth, but simply buying a property doesn't guarantee a profit. To be a successful investor, you must accurately calculate your Cash Flow and Cash on Cash Return (CoC). This calculator helps you analyze the viability of a rental property deal before you sign the papers.
What is Monthly Cash Flow?
Monthly Cash Flow is the money left over after all of the property's operating expenses and debt service (mortgage payments) have been paid. A positive cash flow means the property is putting money in your pocket every month, while a negative cash flow means you are paying out of pocket to hold the asset.
Formula:Total Monthly Income – Total Monthly Expenses = Cash Flow
Expenses You Must Consider
Many new investors make the mistake of only calculating the mortgage payment against the rent. A true analysis includes:
Principal & Interest (P&I): Your loan repayment.
Taxes & Insurance: Escrow costs usually paid annually or monthly.
Vacancy: Properties don't stay rented 365 days a year. Allocating 5-8% for vacancy is a safe buffer.
Maintenance & CapEx: Roofs leak and toilets break. Setting aside 5-10% of rent ensures you have funds for repairs.
What is Cash on Cash Return?
Cash on Cash Return is a metric used to calculate the cash income earned on the cash invested in a property. It measures the annual return on the actual money you put into the deal (Down Payment + Closing Costs).
For example, if you invest $40,000 as a down payment and the property generates $4,000 in positive cash flow per year, your Cash on Cash return is 10%. This allows you to compare real estate returns against other investments like stocks or bonds.
Using the Calculator
Enter your purchase details, financing terms, and estimated operating expenses above. Be conservative with your estimates for Vacancy and Maintenance to ensure your calculation represents a "worst-case" scenario. A Cash on Cash return of 8-12% is generally considered a strong performing rental in today's market.
function calculateCashFlow() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('rpc-price').value);
var downPayment = parseFloat(document.getElementById('rpc-down').value);
var interestRate = parseFloat(document.getElementById('rpc-rate').value);
var loanTerm = parseFloat(document.getElementById('rpc-term').value);
var rent = parseFloat(document.getElementById('rpc-rent').value);
var taxAnnual = parseFloat(document.getElementById('rpc-tax').value);
var insuranceAnnual = parseFloat(document.getElementById('rpc-insurance').value);
var hoa = parseFloat(document.getElementById('rpc-hoa').value);
var vacancyRate = parseFloat(document.getElementById('rpc-vacancy').value);
var maintRate = parseFloat(document.getElementById('rpc-maint').value);
// Validation
if (isNaN(price) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm) || isNaN(rent)) {
alert("Please check your inputs. Ensure all fields contain valid numbers.");
return;
}
// 2. Calculate Mortgage (P&I)
var loanAmount = price – downPayment;
var monthlyRate = (interestRate / 100) / 12;
var totalPayments = loanTerm * 12;
var mortgagePayment = 0;
if (monthlyRate > 0) {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
} else {
mortgagePayment = loanAmount / totalPayments;
}
// 3. Calculate Monthly Expenses
var taxMonthly = taxAnnual / 12;
var insuranceMonthly = insuranceAnnual / 12;
var vacancyCost = rent * (vacancyRate / 100);
var maintCost = rent * (maintRate / 100);
var totalExpenses = mortgagePayment + taxMonthly + insuranceMonthly + hoa + vacancyCost + maintCost;
// 4. Calculate Results
var monthlyCashFlow = rent – totalExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// Avoid division by zero for CoC
var cocReturn = 0;
if (downPayment > 0) {
cocReturn = (annualCashFlow / downPayment) * 100;
}
// 5. Update UI
document.getElementById('rpc-results').style.display = 'block';
document.getElementById('res-mortgage').innerHTML = '$' + mortgagePayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res-expenses').innerHTML = '$' + totalExpenses.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
var cfElement = document.getElementById('res-cashflow');
cfElement.innerHTML = '$' + monthlyCashFlow.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
cfElement.className = monthlyCashFlow >= 0 ? 'rpc-result-value rpc-positive' : 'rpc-result-value rpc-negative';
var annualCfElement = document.getElementById('res-annual-cf');
annualCfElement.innerHTML = '$' + annualCashFlow.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
annualCfElement.className = annualCashFlow >= 0 ? 'rpc-result-value rpc-positive' : 'rpc-result-value rpc-negative';
var cocElement = document.getElementById('res-coc');
cocElement.innerHTML = cocReturn.toFixed(2) + '%';
cocElement.className = cocReturn >= 0 ? 'rpc-result-value rpc-positive' : 'rpc-result-value rpc-negative';
}