Calculate Cash Flow, Cap Rate, and Cash on Cash Return instantly.
Monthly Cash Flow
$0.00
Cash on Cash Return
0.00%
Cap Rate
0.00%
NOI (Annual)
$0.00
Total Cash Invested
$0.00
Monthly Expenses
$0.00
Understanding Rental Property ROI
Investing in real estate is a powerful way to build wealth, but knowing your numbers is critical before signing any contract. This Rental Property ROI Calculator helps investors analyze the profitability of a potential real estate deal by breaking down cash flow, capitalization rate (Cap Rate), and Cash on Cash Return.
Key Metrics Explained
1. Monthly Cash Flow
Cash flow is the net amount of money moving in or out of a business at a specific point in time. In real estate, it is calculated as:
Total Rental Income minus Total Expenses (Mortgage, Taxes, Insurance, Maintenance).
Positive cash flow indicates that the property generates income, while negative cash flow means you are losing money every month.
2. Cash on Cash Return (CoC)
This metric measures the annual return the investor made on the property in relation to the amount of mortgage paid during the same year. It is considered one of the most important ROI metrics because it focuses on the actual cash you invested, not the total loan amount.
Formula: Annual Pre-Tax Cash Flow / Total Cash Invested
3. Cap Rate (Capitalization Rate)
The Cap Rate indicates the potential return on an investment property, assuming the property was bought with cash (no loan). It helps compare the profitability of similar properties regardless of financing methods.
Formula: Net Operating Income (NOI) / Purchase Price
How to Use This Calculator
To get the most accurate results, ensure you input realistic numbers for expenses. Don't forget to account for:
Vacancy Rates: Properties aren't rented 100% of the time. A 5-8% vacancy provision is standard.
Maintenance & Repairs: Budgeting 10-15% of rent for future repairs protects your cash flow.
Closing Costs: These add to your initial cash investment, affecting your Cash on Cash return.
function calculateROI() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('purchasePrice').value) || 0;
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var closingCosts = parseFloat(document.getElementById('closingCosts').value) || 0;
var interestRate = parseFloat(document.getElementById('interestRate').value) || 0;
var termYears = parseFloat(document.getElementById('loanTerm').value) || 0;
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var annualTax = parseFloat(document.getElementById('annualTax').value) || 0;
var annualInsurance = parseFloat(document.getElementById('annualInsurance').value) || 0;
var monthlyHOA = parseFloat(document.getElementById('monthlyHOA').value) || 0;
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value) || 0;
// 2. Calculate Mortgage Payment (Principal & Interest)
var loanAmount = price – downPayment;
var monthlyRate = (interestRate / 100) / 12;
var totalPayments = termYears * 12;
var monthlyPI = 0;
if (interestRate > 0) {
monthlyPI = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
} else {
monthlyPI = loanAmount / totalPayments;
}
if (isNaN(monthlyPI)) monthlyPI = 0;
// 3. Calculate Monthly Expenses
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
var vacancyCost = monthlyRent * (vacancyRate / 100);
var totalMonthlyExpenses = monthlyPI + monthlyTax + monthlyInsurance + monthlyHOA + vacancyCost;
var operatingExpenses = monthlyTax + monthlyInsurance + monthlyHOA + vacancyCost; // Excluding Mortgage for NOI
// 4. Calculate Key Metrics
var monthlyCashFlow = monthlyRent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
var totalCashInvested = downPayment + closingCosts;
var cashOnCash = 0;
if (totalCashInvested > 0) {
cashOnCash = (annualCashFlow / totalCashInvested) * 100;
}
// NOI (Net Operating Income) = Income – Operating Expenses (No Mortgage)
var annualNOI = (monthlyRent * 12) – (operatingExpenses * 12);
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
// 5. Display Results
document.getElementById('resultsSection').style.display = 'block';
// Helper for formatting currency
var formatCurrency = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
document.getElementById('resCashFlow').innerText = formatCurrency.format(monthlyCashFlow);
document.getElementById('resCashFlow').className = monthlyCashFlow >= 0 ? 'result-value value-positive' : 'result-value value-negative';
document.getElementById('resCoc').innerText = cashOnCash.toFixed(2) + '%';
document.getElementById('resCoc').className = cashOnCash >= 0 ? 'result-value value-positive' : 'result-value value-negative';
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + '%';
document.getElementById('resNOI').innerText = formatCurrency.format(annualNOI);
document.getElementById('resTotalInvestment').innerText = formatCurrency.format(totalCashInvested);
document.getElementById('resMonthlyExpenses').innerText = formatCurrency.format(totalMonthlyExpenses);
}