Investing in real estate is one of the most reliable ways to build wealth, but it requires precise calculations. This Rental Property Cash Flow Calculator helps investors analyze potential deals by determining the Net Operating Income (NOI), monthly cash flow, and the Cash on Cash (CoC) Return.
Key Metrics Explained
Cash Flow: The net amount of cash moving in or out of the investment each month. Positive cash flow means the property pays for itself and generates profit. Formula: Income – (Operating Expenses + Mortgage Payment).
Net Operating Income (NOI): A measure of profitability before financing costs. It helps determine the value of the property independent of the loan. Formula: Revenue – Operating Expenses.
Cash on Cash Return: A percentage return on the actual cash you invested (down payment + closing costs), not the total loan amount. It represents the "bang for your buck."
Cap Rate: The rate of return on a real estate investment property based on the income that the property is expected to generate. Formula: NOI / Purchase Price.
How to Use This Calculator
To get the most accurate results, input your expected loan terms and realistic expense estimates. Don't forget to account for "hidden" costs like vacancy (periods where the property sits empty) and maintenance (saving for future repairs like a new roof or water heater). A standard rule of thumb is to allocate at least 5-10% of monthly rent for maintenance.
Example Calculation
Imagine purchasing a property for $300,000 with a 20% down payment ($60,000). If the property generates $2,500 in monthly rent and your total operating expenses (taxes, insurance, maintenance) plus mortgage interest come to $2,100, your monthly cash flow is positive $400. This simple math is crucial before signing any purchase agreement.
function calculateRentalYield() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('purchasePrice').value) || 0;
var downPercent = parseFloat(document.getElementById('downPaymentPercent').value) || 0;
var rate = parseFloat(document.getElementById('interestRate').value) || 0;
var term = parseFloat(document.getElementById('loanTerm').value) || 0;
var rent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var taxYearly = parseFloat(document.getElementById('propertyTaxYearly').value) || 0;
var insuranceYearly = parseFloat(document.getElementById('insuranceYearly').value) || 0;
var hoa = parseFloat(document.getElementById('hoaMonthly').value) || 0;
var vacancyPercent = parseFloat(document.getElementById('vacancyRate').value) || 0;
var maintPercent = parseFloat(document.getElementById('maintenanceRate').value) || 0;
// 2. Loan Calculations
var downPayment = price * (downPercent / 100);
var loanAmount = price – downPayment;
var monthlyRate = (rate / 100) / 12;
var numPayments = term * 12;
// Mortgage Payment Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
var mortgagePayment = 0;
if (rate > 0) {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
} else {
mortgagePayment = loanAmount / numPayments;
}
// 3. Operating Expenses Calculations
var vacancyCost = rent * (vacancyPercent / 100);
var maintCost = rent * (maintPercent / 100);
var monthlyTax = taxYearly / 12;
var monthlyInsurance = insuranceYearly / 12;
var totalOperatingExpenses = monthlyTax + monthlyInsurance + hoa + vacancyCost + maintCost;
// 4. Profitability Calculations
var noi = rent – totalOperatingExpenses; // Net Operating Income
var cashFlow = noi – mortgagePayment;
var annualCashFlow = cashFlow * 12;
var annualNOI = noi * 12;
// Assuming 3% closing costs for calculation of total cash invested roughly, or just use downpayment for simplicity of UI
// To be precise to the inputs provided:
var totalCashInvested = downPayment;
var cocReturn = 0;
if (totalCashInvested > 0) {
cocReturn = (annualCashFlow / totalCashInvested) * 100;
}
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
// 5. Update UI
document.getElementById('resIncome').innerText = '$' + rent.toFixed(2);
document.getElementById('resMortgage').innerText = '$' + mortgagePayment.toFixed(2);
document.getElementById('resExpenses').innerText = '$' + totalOperatingExpenses.toFixed(2);
document.getElementById('resNOI').innerText = '$' + noi.toFixed(2);
var cashFlowEl = document.getElementById('resCashFlow');
cashFlowEl.innerText = '$' + cashFlow.toFixed(2);
// Styling for positive/negative cash flow
cashFlowEl.className = cashFlow >= 0 ? 'positive' : 'negative';
if(cashFlow >= 0) cashFlowEl.innerText = "+$" + cashFlow.toFixed(2);
document.getElementById('resCoC').innerText = cocReturn.toFixed(2) + '%';
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + '%';
// Show result box
document.getElementById('rpcResult').style.display = 'block';
}