function calculateRental() {
// 1. Get Inputs
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value) || 0;
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var interestRate = parseFloat(document.getElementById('interestRate').value) || 0;
var loanTerm = parseFloat(document.getElementById('loanTerm').value) || 0;
var closingCosts = parseFloat(document.getElementById('closingCosts').value) || 0;
var rehabCosts = parseFloat(document.getElementById('rehabCosts').value) || 0;
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var otherIncome = parseFloat(document.getElementById('otherIncome').value) || 0;
var propertyTaxYearly = parseFloat(document.getElementById('propertyTax').value) || 0;
var insuranceYearly = parseFloat(document.getElementById('insurance').value) || 0;
var hoaFees = parseFloat(document.getElementById('hoaFees').value) || 0;
var maintenanceRate = parseFloat(document.getElementById('maintenance').value) || 0;
var vacancyRate = parseFloat(document.getElementById('vacancy').value) || 0;
var managementRate = parseFloat(document.getElementById('management').value) || 0;
// 2. Calculate Mortgage
var loanAmount = purchasePrice – downPayment;
var monthlyMortgage = 0;
if (loanAmount > 0 && interestRate > 0 && loanTerm > 0) {
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
// Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
} else if (loanAmount > 0 && interestRate === 0) {
monthlyMortgage = loanAmount / (loanTerm * 12);
}
// 3. Calculate Income
var totalMonthlyIncome = monthlyRent + otherIncome;
var totalAnnualIncome = totalMonthlyIncome * 12;
// 4. Calculate Expenses
var maintenanceCost = totalMonthlyIncome * (maintenanceRate / 100);
var vacancyCost = totalMonthlyIncome * (vacancyRate / 100);
var managementCost = totalMonthlyIncome * (managementRate / 100);
var fixedMonthlyExpenses = (propertyTaxYearly / 12) + (insuranceYearly / 12) + hoaFees;
var variableMonthlyExpenses = maintenanceCost + vacancyCost + managementCost;
var totalMonthlyExpensesNoMortgage = fixedMonthlyExpenses + variableMonthlyExpenses;
// 5. Calculate Cash Flow
var monthlyCashFlow = totalMonthlyIncome – monthlyMortgage – totalMonthlyExpensesNoMortgage;
var annualCashFlow = monthlyCashFlow * 12;
// 6. Calculate NOI (Net Operating Income)
// NOI = Annual Income – Annual Expenses (excluding mortgage interest & tax usually, but simplified here as OpEx)
// Standard NOI excludes debt service (mortgage)
var annualExpensesNoMortgage = totalMonthlyExpensesNoMortgage * 12;
var noi = totalAnnualIncome – annualExpensesNoMortgage;
// 7. Calculate Returns
var totalCashInvested = downPayment + closingCosts + rehabCosts;
var capRate = 0;
if (purchasePrice > 0) {
capRate = (noi / purchasePrice) * 100;
}
var cashOnCash = 0;
if (totalCashInvested > 0) {
cashOnCash = (annualCashFlow / totalCashInvested) * 100;
}
// 8. Update UI
document.getElementById('resIncome').innerText = '$' + totalMonthlyIncome.toFixed(2).replace(/\B(?=(\d{3})+(?!\d))/g, ",");
document.getElementById('resMortgage').innerText = '$' + monthlyMortgage.toFixed(2).replace(/\B(?=(\d{3})+(?!\d))/g, ",");
document.getElementById('resExpenses').innerText = '$' + totalMonthlyExpensesNoMortgage.toFixed(2).replace(/\B(?=(\d{3})+(?!\d))/g, ",");
var cfElement = document.getElementById('resCashFlow');
cfElement.innerText = '$' + monthlyCashFlow.toFixed(2).replace(/\B(?=(\d{3})+(?!\d))/g, ",");
if (monthlyCashFlow >= 0) {
cfElement.className = "rp-highlight rp-positive";
} else {
cfElement.className = "rp-highlight rp-negative";
}
document.getElementById('resNOI').innerText = '$' + noi.toFixed(2).replace(/\B(?=(\d{3})+(?!\d))/g, ",");
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + '%';
var cocElement = document.getElementById('resCoC');
cocElement.innerText = cashOnCash.toFixed(2) + '%';
if (cashOnCash >= 0) {
cocElement.className = "rp-highlight rp-positive";
} else {
cocElement.className = "rp-highlight rp-negative";
}
document.getElementById('resInvested').innerText = '$' + totalCashInvested.toFixed(2).replace(/\B(?=(\d{3})+(?!\d))/g, ",");
// Show results
document.getElementById('resultsArea').style.display = 'block';
}
Understanding Rental Property Cash Flow
Investing in real estate is one of the most reliable ways to build wealth, but it requires careful analysis. This Rental Property Cash Flow Calculator helps investors determine if a potential property will generate income or drain resources. By inputting specific data points like loan terms, rental income, and operating expenses, you can derive critical metrics like Cap Rate, NOI, and Cash-on-Cash Return.
Key Metrics Explained
1. Net Operating Income (NOI)
NOI is a calculation used to analyze the profitability of income-generating real estate investments. It equals all revenue from the property, minus all reasonably necessary operating expenses.
Formula: Real Estate Revenue – Operating Expenses (excluding mortgage payments)
2. Cap Rate (Capitalization Rate)
The Cap Rate measures a property's natural rate of return for a single year without taking into account debt (mortgage). It allows you to compare the profitability of different properties independent of how they are financed. A higher cap rate generally implies a better ROI, though often with higher risk.
Formula: (NOI / Purchase Price) × 100%
3. Cash on Cash Return (CoC)
This is arguably the most important metric for investors using leverage (loans). It measures the annual return on the actual cash invested (down payment, closing costs, rehab), rather than the total purchase price.
Formula: (Annual Pre-Tax Cash Flow / Total Cash Invested) × 100%
4. The 50% Rule
A common rule of thumb in real estate is the 50% rule, which states that operating expenses (taxes, insurance, maintenance, vacancy) will often equal about 50% of the gross rental income. While this calculator uses your specific inputs for greater accuracy, checking against the 50% rule is a good quick sanity check.
Example Scenario
Imagine you buy a property for $250,000 with a $50,000 down payment. You rent it out for $2,200/month.
While $336 might seem low, your Cash on Cash return could be around 7-8%, which outperforms many traditional savings accounts, plus you benefit from property appreciation and loan paydown.
Why Accurate Expense Estimation Matters
New investors often underestimate expenses. Don't forget to account for:
Vacancy: The property won't be rented 365 days a year. 5-8% is a standard safety buffer.
CapEx (Capital Expenditures): Roofs, HVAC systems, and water heaters eventually need replacing. Allocating a maintenance percentage helps save for these big-ticket items.
Management Fees: Even if you self-manage now, calculating a 10% management fee ensures the deal still works if you hire a pro later.