Rental Property Cash Flow & ROI Calculator
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Investment Analysis
Monthly Cash Flow
$0.00
Cash on Cash Return
0.00%
Cap Rate (Capitalization)
0.00%
Net Operating Income (Annual)
$0.00
Monthly Mortgage Payment
$0.00
Total Cash Needed
$0.00
Understanding Your Rental Property Analysis
Investing in real estate requires more than just guessing; it requires precise mathematical analysis to ensure profitability. This Rental Property Cash Flow Calculator helps investors determine the viability of a potential rental property by calculating key metrics like Cash Flow, Cash on Cash Return, and Cap Rate.
Key Metrics Explained
1. Monthly Cash Flow
This is the most critical number for buy-and-hold investors. It represents the profit you make each month after all expenses and mortgage payments are paid.
Formula: Total Rental Income – (Mortgage + Taxes + Insurance + HOA + Maintenance + Vacancy Reserves).
2. Cash on Cash (CoC) Return
This percentage tells you how hard your money is working. It compares your annual cash flow to the total amount of cash you actually invested (Down Payment + Closing Costs + Rehab costs). A CoC return of 8-12% is generally considered a good target for rental properties.
3. Capitalization Rate (Cap Rate)
Cap Rate measures the property's natural rate of return without factoring in financing (mortgage). It allows you to compare the profitability of one property against another directly. It is calculated by dividing the Net Operating Income (NOI) by the Purchase Price.
4. Net Operating Income (NOI)
NOI is the total income the property generates minus all operating expenses (Vacancy, Taxes, Insurance, Maintenance) but excluding the mortgage payment. This figure is crucial for determining the raw earning potential of the asset.
How to Use This Calculator
- Purchase Price: The agreed-upon sale price of the home.
- Down Payment: The percentage of the price you are paying upfront. For investment properties, this is typically 20-25%.
- Vacancy Rate: Always account for vacancy. 5% represents roughly 18 days of vacancy per year, which is a standard safety margin.
- Maintenance: Even if the house is new, budget for repairs. A common rule of thumb is saving 10-15% of the rent for future CapEx (Capital Expenditures).
Why Cash Flow Matters
Positive cash flow ensures that the property pays for itself while you benefit from appreciation and loan paydown. If a property has negative cash flow, you are essentially paying every month to own it, which increases your risk significantly. Always aim for a "Green" cash flow number in the results above.
function calculateRentalROI() {
// 1. Get Inputs
var price = parseFloat(document.getElementById('purchasePrice').value);
var downPercent = parseFloat(document.getElementById('downPaymentPercent').value);
var interestRate = parseFloat(document.getElementById('interestRate').value);
var termYears = parseFloat(document.getElementById('loanTerm').value);
var closingCosts = parseFloat(document.getElementById('closingCosts').value);
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value);
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value);
var annualTax = parseFloat(document.getElementById('annualTax').value);
var annualInsurance = parseFloat(document.getElementById('annualInsurance').value);
var monthlyMaintenance = parseFloat(document.getElementById('monthlyMaintenance').value);
var monthlyHOA = parseFloat(document.getElementById('monthlyHOA').value);
// Validation
if (isNaN(price) || isNaN(monthlyRent) || isNaN(interestRate)) {
alert("Please enter valid numbers for Price, Rent, and Interest Rate.");
return;
}
// 2. Loan Calculations
var downPaymentAmount = price * (downPercent / 100);
var loanAmount = price – downPaymentAmount;
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = termYears * 12;
var monthlyMortgage = 0;
if (interestRate === 0) {
monthlyMortgage = loanAmount / numberOfPayments;
} else {
monthlyMortgage = (loanAmount * monthlyRate) / (1 – Math.pow(1 + monthlyRate, -numberOfPayments));
}
// 3. Operating Expenses Calculations
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
var vacancyLoss = monthlyRent * (vacancyRate / 100);
var totalOperatingExpenses = monthlyTax + monthlyInsurance + monthlyMaintenance + monthlyHOA + vacancyLoss;
// 4. Income Calculations
var effectiveGrossIncome = monthlyRent – vacancyLoss; // Actual income after vacancy
var netOperatingIncome = (effectiveGrossIncome – (monthlyTax + monthlyInsurance + monthlyMaintenance + monthlyHOA)) * 12; // Annual NOI
var totalMonthlyExpenses = totalOperatingExpenses + monthlyMortgage;
var monthlyCashFlow = monthlyRent – totalMonthlyExpenses; // Note: using gross rent minus ALL expenses including vacancy allowance in expense bucket
// Refined Cash Flow Logic: (Rent – Vacancy) – (OpEx + Mortgage)
monthlyCashFlow = effectiveGrossIncome – (monthlyTax + monthlyInsurance + monthlyMaintenance + monthlyHOA + monthlyMortgage);
var annualCashFlow = monthlyCashFlow * 12;
// 5. Return Calculations
var totalCashInvested = downPaymentAmount + closingCosts;
var cashOnCashReturn = (annualCashFlow / totalCashInvested) * 100;
var capRate = (netOperatingIncome / price) * 100;
// 6. Display Results
var resultDiv = document.getElementById('calc-results');
resultDiv.style.display = 'block';
// Helper to format currency
var fmt = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
document.getElementById('resultCashFlow').innerHTML = fmt.format(monthlyCashFlow);
document.getElementById('resultMortgage').innerHTML = fmt.format(monthlyMortgage);
document.getElementById('resultNOI').innerHTML = fmt.format(netOperatingIncome);
document.getElementById('resultCashNeeded').innerHTML = fmt.format(totalCashInvested);
document.getElementById('resultCOC').innerHTML = cashOnCashReturn.toFixed(2) + '%';
document.getElementById('resultCapRate').innerHTML = capRate.toFixed(2) + '%';
// Dynamic Color Styling for Cash Flow
var cfElement = document.getElementById('resultCashFlow');
if (monthlyCashFlow >= 0) {
cfElement.className = 'result-value positive-cf';
} else {
cfElement.className = 'result-value negative-cf';
}
// Scroll to results
resultDiv.scrollIntoView({ behavior: 'smooth' });
}