Understanding cash flow is the cornerstone of successful real estate investing. This Rental Property Cash Flow Calculator helps investors determine if a potential property will generate a profit or become a liability. Cash flow represents the money left over after all operating expenses and mortgage payments have been made.
Why Cash Flow Matters
Positive cash flow ensures that the investment pays for itself while potentially providing passive income. A property with strong cash flow can help you weather market downturns, handle unexpected repairs, and scale your portfolio. Conversely, negative cash flow means you are paying out of pocket to hold the property, which increases risk.
How This Calculator Works
Our tool analyzes three main components to give you an accurate financial picture:
Gross Income: The total rent collected, adjusted for vacancy rates (periods where the property sits empty).
Operating Expenses: These include property taxes, insurance, HOA fees, and maintenance reserves.
Debt Service: The principal and interest payments on your mortgage.
Understanding Key Metrics
Metric
Definition
Good Target?
Cash Flow
Net profit monthly after all bills.
$200 – $500+ per door
Cash on Cash Return
Annual pre-tax cash flow divided by total cash invested.
8% – 12% or higher
NOI (Net Operating Income)
Income minus operating expenses (excluding mortgage).
Higher is better
Example Calculation
Imagine you purchase a property for $250,000 with 20% down ($50,000). Your loan is $200,000 at 6.5% interest over 30 years.
Monthly Mortgage: ~$1,264
Property Taxes & Insurance: ~$350/mo
Maintenance & Vacancy: ~$330/mo
Total Rent: $2,200
In this scenario, your total expenses might hover around $1,944, leaving you with a positive cash flow of roughly $256 per month.
Pro Tips for Investors
Don't ignore vacancy: Always budget for at least 5-8% vacancy, even in hot markets.
CapEx reserves: Roofs and HVAC systems eventually break. Setting aside 5-10% of rent for Capital Expenditures is crucial for long-term accuracy.
Conservative estimates: It is better to underestimate rent and overestimate expenses to ensure a margin of safety.
function calculateCashFlow() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('rp-purchase-price').value) || 0;
var downPaymentPercent = parseFloat(document.getElementById('rp-down-payment').value) || 0;
var interestRate = parseFloat(document.getElementById('rp-interest-rate').value) || 0;
var loanTermYears = parseFloat(document.getElementById('rp-loan-term').value) || 0;
var monthlyRent = parseFloat(document.getElementById('rp-monthly-rent').value) || 0;
var vacancyRate = parseFloat(document.getElementById('rp-vacancy-rate').value) || 0;
var annualTax = parseFloat(document.getElementById('rp-property-tax').value) || 0;
var annualInsurance = parseFloat(document.getElementById('rp-insurance').value) || 0;
var maintenancePercent = parseFloat(document.getElementById('rp-maintenance').value) || 0;
var monthlyHoa = parseFloat(document.getElementById('rp-hoa').value) || 0;
// 2. Calculate Mortgage Payment
var downPaymentAmount = price * (downPaymentPercent / 100);
var loanAmount = price – downPaymentAmount;
var monthlyInterest = (interestRate / 100) / 12;
var numberOfPayments = loanTermYears * 12;
var mortgagePayment = 0;
if (loanAmount > 0 && interestRate > 0) {
mortgagePayment = loanAmount * (monthlyInterest * Math.pow(1 + monthlyInterest, numberOfPayments)) / (Math.pow(1 + monthlyInterest, numberOfPayments) – 1);
} else if (loanAmount > 0 && interestRate === 0) {
mortgagePayment = loanAmount / numberOfPayments;
}
// 3. Calculate Monthly Expenses
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
var vacancyCost = monthlyRent * (vacancyRate / 100);
var maintenanceCost = monthlyRent * (maintenancePercent / 100);
var totalOperatingExpenses = monthlyTax + monthlyInsurance + vacancyCost + maintenanceCost + monthlyHoa;
var totalExpenses = totalOperatingExpenses + mortgagePayment;
// 4. Calculate Results
var effectiveGrossIncome = monthlyRent – vacancyCost; // NOI usually subtracts vacancy from potential gross
// NOI = Effective Gross Income – Operating Expenses (excluding debt service)
// However, we calculated vacancy as an expense line item above for simplicity in totaling.
// Standard NOI: (Gross Rent – Vacancy Loss) – Operating Expenses.
// Let's align variables:
var noi = (monthlyRent – vacancyCost) – (monthlyTax + monthlyInsurance + maintenanceCost + monthlyHoa);
var cashFlow = monthlyRent – totalExpenses; // Rent – (Operating + Vacancy + Mortgage)
var annualCashFlow = cashFlow * 12;
var totalCashInvested = downPaymentAmount;
// Note: Closing costs often add 2-5%, but we'll stick to down payment for simplicity unless added input
var cashOnCash = 0;
if (totalCashInvested > 0) {
cashOnCash = (annualCashFlow / totalCashInvested) * 100;
}
// 5. Update UI
var resultArea = document.getElementById('rp-results-area');
resultArea.style.display = 'block';
// Helper for currency formatting
var fmt = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
document.getElementById('rp-display-cashflow').textContent = fmt.format(cashFlow);
document.getElementById('rp-display-coc').textContent = cashOnCash.toFixed(2) + '%';
document.getElementById('rp-display-noi').textContent = fmt.format(noi);
document.getElementById('rp-display-expenses').textContent = fmt.format(totalExpenses);
// Styling based on result
var cashFlowCard = document.getElementById('rp-card-cashflow');
if (cashFlow >= 0) {
cashFlowCard.className = 'rp-result-card positive';
} else {
cashFlowCard.className = 'rp-result-card negative';
}
}