function calculateRentalROI() {
// 1. Get Values using var
var price = parseFloat(document.getElementById('purchasePrice').value);
var down = parseFloat(document.getElementById('downPayment').value);
var rate = parseFloat(document.getElementById('interestRate').value);
var term = parseFloat(document.getElementById('loanTerm').value);
var rent = parseFloat(document.getElementById('monthlyRent').value);
var expenses = parseFloat(document.getElementById('monthlyExpenses').value);
var vacancy = parseFloat(document.getElementById('vacancyRate').value);
var errorDiv = document.getElementById('errorDisplay');
var resultDiv = document.getElementById('resultSection');
// 2. Validation
if (isNaN(price) || isNaN(down) || isNaN(rate) || isNaN(term) || isNaN(rent) || isNaN(expenses) || isNaN(vacancy)) {
errorDiv.style.display = 'block';
resultDiv.style.display = 'none';
return;
}
errorDiv.style.display = 'none';
// 3. Logic
var loanAmount = price – down;
var monthlyRate = (rate / 100) / 12;
var numPayments = term * 12;
// Mortgage Calculation (Principal & Interest)
var mortgagePayment = 0;
if (rate === 0) {
mortgagePayment = loanAmount / numPayments;
} else {
mortgagePayment = (loanAmount * monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
}
// Vacancy Loss
var vacancyLoss = rent * (vacancy / 100);
var effectiveGrossIncome = rent – vacancyLoss;
// Net Operating Income (NOI) = Income – Operating Expenses (excluding mortgage)
var noiMonthly = effectiveGrossIncome – expenses;
var noiAnnual = noiMonthly * 12;
// Total Expenses for Cash Flow (Mortgage + Op Expenses)
var totalMonthlyExpenses = mortgagePayment + expenses;
// Cash Flow
var monthlyCashFlow = effectiveGrossIncome – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// Returns
var cashOnCash = (annualCashFlow / down) * 100;
var capRate = (noiAnnual / price) * 100;
// 4. Update UI
var currencyFmt = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
document.getElementById('resMortgage').innerHTML = currencyFmt.format(mortgagePayment);
document.getElementById('resTotalExp').innerHTML = currencyFmt.format(totalMonthlyExpenses);
document.getElementById('resNOI').innerHTML = currencyFmt.format(noiMonthly);
var cfElement = document.getElementById('resCashFlow');
cfElement.innerHTML = currencyFmt.format(monthlyCashFlow);
cfElement.style.color = monthlyCashFlow >= 0 ? '#27ae60' : '#c0392b';
document.getElementById('resAnnualFlow').innerHTML = currencyFmt.format(annualCashFlow);
document.getElementById('resCoC').innerHTML = cashOnCash.toFixed(2) + "%";
document.getElementById('resCapRate').innerHTML = capRate.toFixed(2) + "%";
resultDiv.style.display = 'block';
}
Understanding Your Rental Property Analysis
Successful real estate investing relies on accurate mathematics, not just intuition. This Rental Property Cash Flow Calculator helps investors determine the viability of a potential investment by breaking down the most critical financial metrics used in the industry.
Key Metrics Explained
1. Monthly Cash Flow
This is your "take-home" profit after all obligations are met. It is calculated by taking your total rental income, subtracting vacancy losses, operating expenses (taxes, insurance, maintenance, HOA fees), and your debt service (mortgage). A positive cash flow indicates the property pays for itself and generates income, while a negative cash flow means you are paying out of pocket to hold the property.
2. Cash on Cash Return (CoC)
Perhaps the most important metric for leveraged investors, Cash on Cash Return measures the annual return on the actual cash you invested (Down Payment). Unlike Cap Rate, which looks at the total value of the property, CoC tells you how hard your specific dollars are working. A CoC of 8-12% is often considered a strong target for residential rentals.
3. Cap Rate (Capitalization Rate)
The Cap Rate represents the rate of return on the property assuming you paid all cash (no mortgage). It is calculated by dividing the Annual Net Operating Income (NOI) by the Purchase Price. This metric allows you to compare the profitability of different properties irrespective of financing terms. In high-demand urban areas, Cap Rates tend to be lower (3-5%), while risky or rural areas may offer higher Cap Rates (8-10%+).
How to Estimate Expenses
One of the most common mistakes new investors make is underestimating operating expenses. When using this calculator, ensure your "Monthly Op. Expenses" field includes:
Property Taxes: Usually 1-2% of the property value annually.
Insurance: Landlord policies are often 20% higher than homeowner policies.
Maintenance & CapEx: Set aside 5-10% of rent for repairs and future roof/HVAC replacements.
Property Management: If you don't self-manage, account for 8-10% of monthly rent.
Use this tool to run "what-if" scenarios. Adjust your offer price (Purchase Price) or down payment to see how it affects your Cash on Cash return to find the deal that meets your investment criteria.