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Rental Property ROI & Cash Flow Calculator

Investment Summary

Initial Cash Invested:
Monthly Mortgage (P&I):
Monthly Net Cash Flow:
Cap Rate:
Cash on Cash Return:
function calculateRentalROI() { var price = parseFloat(document.getElementById('purchasePrice').value); var downPercent = parseFloat(document.getElementById('downPaymentPercent').value); var rate = parseFloat(document.getElementById('interestRate').value) / 100 / 12; var term = parseFloat(document.getElementById('loanTerm').value) * 12; var rent = parseFloat(document.getElementById('monthlyRent').value); var expenses = parseFloat(document.getElementById('monthlyExpenses').value); if (isNaN(price) || isNaN(downPercent) || isNaN(rent)) { alert("Please enter valid numbers in all fields."); return; } var downPaymentAmount = price * (downPercent / 100); var loanAmount = price – downPaymentAmount; // Monthly Mortgage Calculation var monthlyMortgage = 0; if (rate > 0) { monthlyMortgage = loanAmount * (rate * Math.pow(1 + rate, term)) / (Math.pow(1 + rate, term) – 1); } else { monthlyMortgage = loanAmount / term; } var totalMonthlyOutgo = monthlyMortgage + expenses; var monthlyCashFlow = rent – totalMonthlyOutgo; var annualCashFlow = monthlyCashFlow * 12; // NOI = Annual Rent – Annual Expenses (Excluding Mortgage) var annualExpensesNoMortgage = expenses * 12; var noi = (rent * 12) – annualExpensesNoMortgage; var capRate = (noi / price) * 100; var cocReturn = (annualCashFlow / downPaymentAmount) * 100; document.getElementById('initialCash').innerHTML = "$" + downPaymentAmount.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('monthlyMortgage').innerHTML = "$" + monthlyMortgage.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('monthlyCashFlow').innerHTML = "$" + monthlyCashFlow.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('capRate').innerHTML = capRate.toFixed(2) + "%"; document.getElementById('cocReturn').innerHTML = cocReturn.toFixed(2) + "%"; document.getElementById('roiResult').style.display = 'block'; }

How to Calculate Rental Property ROI

Investing in real estate is one of the most reliable ways to build wealth, but only if the numbers work. Our Rental Property ROI Calculator helps you determine if a potential investment will generate enough cash flow to justify the risk. To understand your returns, you must look at two primary metrics: Cap Rate and Cash on Cash Return.

Understanding the Key Metrics

  • Cap Rate (Capitalization Rate): This measures the property's natural rate of return without considering financing. It is calculated by dividing the Net Operating Income (NOI) by the purchase price. It's best for comparing the profitability of different properties side-by-side.
  • Cash on Cash Return: This is the "real world" metric for most investors. It measures the annual cash flow relative to the actual amount of cash you pulled out of your pocket (the down payment). If you put $50,000 down and get $5,000 back in profit per year, your Cash on Cash return is 10%.
  • Net Operating Income (NOI): This is your total annual income minus all operating expenses (taxes, insurance, repairs). Crucially, NOI does not include your mortgage payment.

Example ROI Calculation

Imagine you buy a property for $200,000 with a 20% down payment ($40,000). If your monthly rent is $1,800 and your total expenses (mortgage, taxes, insurance) are $1,400, your monthly cash flow is $400.

Annual Cash Flow = $4,800.
Cash on Cash Return = ($4,800 / $40,000) = 12%.

Common Expenses to Include

When using this calculator, ensure your "Monthly Expenses" figure includes:

  • Property Taxes
  • Homeowners Insurance
  • Property Management Fees (typically 8-10% of rent)
  • Maintenance Reserves (plan for 1% of property value per year)
  • Vacancy Allowance (usually 5% of gross rent)
  • HOA Fees (if applicable)

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