function calculateCashFlow() {
// 1. Get Input Values
var price = parseFloat(document.getElementById("purchasePrice").value);
var downPercent = parseFloat(document.getElementById("downPaymentPercent").value);
var rate = parseFloat(document.getElementById("interestRate").value);
var years = parseFloat(document.getElementById("loanTerm").value);
var income = parseFloat(document.getElementById("rentalIncome").value);
var otherExpenses = parseFloat(document.getElementById("monthlyExpenses").value);
// Validation
if (isNaN(price) || isNaN(downPercent) || isNaN(rate) || isNaN(years) || isNaN(income) || isNaN(otherExpenses)) {
alert("Please fill in all fields with valid numbers.");
return;
}
// 2. Calculate Loan Details
var downPaymentAmount = price * (downPercent / 100);
var loanAmount = price – downPaymentAmount;
// Monthly Mortgage Calculation (Principal + Interest)
var monthlyRate = rate / 100 / 12;
var numberOfPayments = years * 12;
var mortgagePayment = 0;
if (rate === 0) {
mortgagePayment = loanAmount / numberOfPayments;
} else {
// M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var mathPow = Math.pow(1 + monthlyRate, numberOfPayments);
mortgagePayment = loanAmount * (monthlyRate * mathPow) / (mathPow – 1);
}
// 3. Calculate Totals
var totalMonthlyExpenses = mortgagePayment + otherExpenses;
var monthlyCashFlow = income – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// Cash on Cash Return = Annual Cash Flow / Total Cash Invested (assuming just down payment for simplicity here, though closing costs usually apply)
// To be precise for this specific simple calc, we use Down Payment as invested capital.
var cocReturn = 0;
if (downPaymentAmount > 0) {
cocReturn = (annualCashFlow / downPaymentAmount) * 100;
}
// 4. Update UI
document.getElementById("results").style.display = "block";
document.getElementById("resMortgage").innerText = "$" + mortgagePayment.toFixed(2);
document.getElementById("resTotalExpenses").innerText = "$" + totalMonthlyExpenses.toFixed(2);
var cfEl = document.getElementById("resMonthlyCF");
cfEl.innerText = "$" + monthlyCashFlow.toFixed(2);
cfEl.className = monthlyCashFlow >= 0 ? "rp-result-value rp-positive" : "rp-result-value rp-negative";
var acfEl = document.getElementById("resAnnualCF");
acfEl.innerText = "$" + annualCashFlow.toFixed(2);
acfEl.className = annualCashFlow >= 0 ? "rp-result-value rp-positive" : "rp-result-value rp-negative";
var cocEl = document.getElementById("resCoC");
cocEl.innerText = cocReturn.toFixed(2) + "%";
cocEl.className = cocReturn >= 0 ? "rp-result-value rp-positive" : "rp-result-value rp-negative";
}
Understanding Rental Property Cash Flow
Investing in real estate is one of the most reliable ways to build wealth, but the success of an investment property hinges on one critical metric: Cash Flow. This calculator helps investors determine if a potential property will yield a profit on a monthly basis.
What is Rental Cash Flow?
Cash flow is the net amount of cash moving into or out of a rental property investment. It is calculated by taking the total rental income and subtracting all monthly expenses.
Positive Cash Flow means the property generates more income than it costs to own and operate. This is the goal for most buy-and-hold investors.
Negative Cash Flow means you are losing money every month to keep the property. While some investors accept this banking on future appreciation, it carries higher risk.
Key Components of the Calculation
Principal & Interest (P&I): The monthly payment to the bank for your mortgage loan. This is often the largest expense.
Operating Expenses: These include property taxes, landlord insurance, HOA fees, maintenance reserves, property management fees, and vacancy allowances.
Cash on Cash Return (CoC): This metric measures the annual return on the actual cash you invested (Down Payment). It is calculated as Annual Cash Flow / Total Cash Invested. A CoC return of 8-12% is often considered good in many markets.
How to Use This Calculator
Input your purchase details, financing terms, and expected income. Be realistic with your "Other Monthly Expenses." A common mistake is underestimating maintenance and vacancy. A safe rule of thumb for beginners is to allocate at least 15-20% of the rent towards maintenance, vacancy, and capital expenditures (CapEx) reserves.