function calculateRentalROI() {
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value);
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value);
var annualTaxes = parseFloat(document.getElementById('annualTaxes').value);
var annualInsurance = parseFloat(document.getElementById('annualInsurance').value);
var maintenancePerc = parseFloat(document.getElementById('maintenancePerc').value) / 100;
var vacancyPerc = parseFloat(document.getElementById('vacancyPerc').value) / 100;
if (isNaN(purchasePrice) || isNaN(monthlyRent) || purchasePrice <= 0) {
alert('Please enter valid numbers for price and rent.');
return;
}
// Calculation Logic
var annualGrossIncome = monthlyRent * 12;
var vacancyLoss = annualGrossIncome * vacancyPerc;
var maintenanceCost = annualGrossIncome * maintenancePerc;
var totalAnnualExpenses = annualTaxes + annualInsurance + maintenanceCost + vacancyLoss;
var netOperatingIncome = annualGrossIncome – totalAnnualExpenses;
var monthlyCashFlow = netOperatingIncome / 12;
var capRate = (netOperatingIncome / purchasePrice) * 100;
// Display Results
document.getElementById('resCashFlow').innerHTML = '$' + monthlyCashFlow.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resNOI').innerHTML = '$' + netOperatingIncome.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resCapRate').innerHTML = capRate.toFixed(2) + '%';
document.getElementById('resExpenses').innerHTML = '$' + totalAnnualExpenses.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('rental-results').style.display = 'block';
}
Understanding Your Rental Property Returns
Investing in real estate requires more than just looking at the monthly rent check. To determine if a property is a "good deal," you must account for the hidden costs of ownership. This rental property calculator helps you break down the financial viability of any residential or commercial asset.
Key Metrics Explained
Net Operating Income (NOI): This is your total income minus all operating expenses. It does not include mortgage payments (debt service), making it the gold standard for comparing different properties' profitability.
Cap Rate (Capitalization Rate): The ratio of NOI to the purchase price. A higher Cap Rate usually suggests a higher potential return, though it may also indicate higher risk in the location or property condition.
Monthly Cash Flow: The actual liquid profit you take home each month after setting aside money for taxes, insurance, repairs, and vacancy.
Practical Example
Imagine you buy a property for $200,000. You rent it for $1,800 per month.
If your taxes are $2,400/year, insurance is $1,000/year, and you set aside 10% for maintenance and 5% for vacancy, your calculation looks like this:
Novice investors often make the mistake of assuming "Rent – Taxes = Profit." However, properties inevitably face wear and tear. Systems like HVAC, roofing, and plumbing require capital reserves. Similarly, no property stays occupied 100% of the time. Accounting for a 5-10% vacancy rate ensures your budget remains realistic when a tenant moves out and the unit sits empty for a month during repairs and re-listing.