Calculate Cash on Cash Return, Cap Rate, and Monthly Cash Flow.
Purchase Details
Income & Expenses
Please enter valid numeric values for all fields.
Financial Performance
Cash on Cash Return:0.00%
Cap Rate:0.00%
Monthly Cash Flow:$0.00
Net Operating Income (NOI) / Mo:$0.00
Total Monthly Expenses:$0.00
Monthly Mortgage Payment:$0.00
function calculateRentalROI() {
// Get inputs
var price = parseFloat(document.getElementById('propPrice').value);
var downPercent = parseFloat(document.getElementById('downPaymentPercent').value);
var closingCosts = parseFloat(document.getElementById('closingCosts').value);
var interestRate = parseFloat(document.getElementById('interestRate').value);
var loanTerm = parseFloat(document.getElementById('loanTerm').value);
var rent = parseFloat(document.getElementById('monthlyRent').value);
var tax = parseFloat(document.getElementById('annualTax').value);
var insurance = parseFloat(document.getElementById('annualInsurance').value);
var hoa = parseFloat(document.getElementById('monthlyHoa').value);
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value);
var maintenanceRate = parseFloat(document.getElementById('maintenanceRate').value);
// Validation
if (isNaN(price) || isNaN(downPercent) || isNaN(closingCosts) || isNaN(interestRate) ||
isNaN(loanTerm) || isNaN(rent) || isNaN(tax) || isNaN(insurance) || isNaN(hoa) ||
isNaN(vacancyRate) || isNaN(maintenanceRate)) {
document.getElementById('errorDisplay').style.display = 'block';
document.getElementById('resultsSection').style.display = 'none';
return;
} else {
document.getElementById('errorDisplay').style.display = 'none';
}
// Calculations
// 1. Initial Investment
var downPaymentAmount = price * (downPercent / 100);
var loanAmount = price – downPaymentAmount;
var totalCashInvested = downPaymentAmount + closingCosts;
// 2. Mortgage Calculation
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
var mortgagePayment = 0;
if (monthlyRate > 0) {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
} else {
mortgagePayment = loanAmount / numberOfPayments;
}
// 3. Operating Expenses
var monthlyTax = tax / 12;
var monthlyInsurance = insurance / 12;
var vacancyCost = rent * (vacancyRate / 100);
var maintenanceCost = rent * (maintenanceRate / 100);
var totalOperatingExpenses = monthlyTax + monthlyInsurance + hoa + vacancyCost + maintenanceCost;
var totalExpensesWithMortgage = totalOperatingExpenses + mortgagePayment;
// 4. Returns
var monthlyNOI = rent – totalOperatingExpenses;
var annualNOI = monthlyNOI * 12;
var monthlyCashFlow = rent – totalExpensesWithMortgage;
var annualCashFlow = monthlyCashFlow * 12;
// 5. ROI Metrics
var capRate = (annualNOI / price) * 100;
var cocReturn = (annualCashFlow / totalCashInvested) * 100;
// Display Results
document.getElementById('resCoc').innerText = cocReturn.toFixed(2) + "%";
document.getElementById('resCap').innerText = capRate.toFixed(2) + "%";
document.getElementById('resCashFlow').innerText = "$" + monthlyCashFlow.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resNoi').innerText = "$" + monthlyNOI.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resTotalExp').innerText = "$" + totalExpensesWithMortgage.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resMortgage').innerText = "$" + mortgagePayment.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resultsSection').style.display = 'block';
}
Mastering Real Estate Investment: Cash on Cash Return & Cap Rate
Investing in rental properties is one of the most reliable ways to build wealth, but simply buying a property and renting it out doesn't guarantee a profit. To succeed, investors must analyze the numbers with precision. The Rental Property ROI Calculator above is designed to help you quickly determine the viability of a potential investment using two critical metrics: Cash on Cash Return and Cap Rate.
Why Use a Rental Property Calculator?
Real estate analysis involves multiple variables—from mortgage interest rates and insurance premiums to vacancy rates and maintenance costs. A small change in any of these figures can turn a profitable deal into a financial drain. This calculator aggregates all monthly income and expenses to provide a clear picture of your actual Monthly Cash Flow.
Key Metrics Explained
1. Cash on Cash Return (CoC)
Cash on Cash Return is arguably the most important metric for investors using leverage (mortgages). It measures the annual return on the actual cash you invested, rather than the total purchase price.
Formula:(Annual Pre-Tax Cash Flow / Total Cash Invested) x 100
For example, if you invest $50,000 (down payment + closing costs) and the property generates $5,000 in net cash flow per year, your CoC return is 10%. This allows you to compare real estate returns directly against other investments like stocks or bonds.
2. Capitalization Rate (Cap Rate)
Cap Rate measures the property's natural rate of return assuming you paid all cash. It helps compare the profitability of different properties regardless of how they are financed.
Formula:(Net Operating Income / Purchase Price) x 100
Note that Net Operating Income (NOI) includes operating expenses (taxes, insurance, maintenance) but excludes mortgage payments.
3. Net Operating Income (NOI)
NOI is the total income the property generates after all operating expenses are paid, but before debt service (mortgage). A positive NOI indicates the property can support its own operations.
How to Estimate Expenses accurately
One of the biggest mistakes new investors make is underestimating expenses. When using the calculator, ensure you account for:
Vacancy Rate: Properties won't be rented 365 days a year. A standard conservative estimate is 5-8% (about 2-4 weeks of vacancy per year).
Maintenance & CapEx: Even if the house is new, things break. Setting aside 5-10% of the rent for repairs ensures you have funds for a new roof or water heater when needed.
Property Management: If you don't plan to be a landlord yourself, expect to pay a property manager 8-10% of the monthly rent.
What is a Good ROI?
A "good" return depends on your strategy and the current market:
Cash Flow Strategy: Investors seeking passive income often look for a Cash on Cash return of 8-12% or higher.
Appreciation Strategy: Investors in high-growth markets (like major cities) might accept a lower CoC return (e.g., 2-5%) because they bank on the property value doubling over 10 years.
Frequently Asked Questions
Does this calculator include tax benefits?
This calculator focuses on pre-tax cash flow. Real estate offers significant tax benefits like depreciation, which can further enhance your actual ROI, but these require a specialized tax analysis.
Should I include the principal paydown in my return?
Cash on Cash return only looks at liquid cash flow. However, your tenants are also paying down your loan principal every month, increasing your equity. This "Equity Paydown" is an additional form of profit not captured in the CoC percentage but is vital for long-term wealth building.
Use the calculator above to run scenarios with different interest rates, down payments, and rental prices to find the investment strategy that meets your financial goals.