Rental Property Cash Flow Calculator
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Total Monthly Income:
$0.00
Effective Vacancy Cost:
$0.00
Property Management Cost:
$0.00
Total Monthly Expenses:
$0.00
Net Monthly Cash Flow:
$0.00
Annual Cash Flow:
$0.00
Understanding Rental Property Cash Flow
Cash flow is the lifeblood of any real estate investment. It represents the net amount of money moving in or out of your rental business after all expenses have been paid. A positive cash flow means your property is generating profit, while a negative cash flow implies you are losing money every month to hold the property.
Using a Rental Property Cash Flow Calculator is essential for investors to evaluate a potential deal before signing any papers. It helps you look beyond the gross rent and understand the true cost of ownership, including often-overlooked expenses like vacancy rates and maintenance reserves.
Key Inputs for Accurate Calculation
- Gross Monthly Rent: The total amount you charge tenants per month.
- Mortgage Payment: Your monthly principal and interest payment.
- Vacancy Rate: A percentage of time the property sits empty. A standard conservative estimate is 5-8% (about one month per year).
- Maintenance Reserves: Money set aside for repairs. Most investors budget 1% of the property value per year, or roughly 5-10% of the monthly rent.
- Property Management: If you hire a professional manager, they typically charge 8-12% of the collected rent.
How to Interpret Your Results
Once you calculate your cash flow, how do you know if it's a good investment?
- $100 – $200 / door: Generally considered an acceptable minimum for single-family rentals.
- $300+ / door: Considered a strong investment with a healthy safety margin.
- Negative Cash Flow: Unless you are banking purely on rapid appreciation (a risky strategy), negative cash flow properties are liabilities that drain your resources.
The 1% Rule and Cash Flow
A quick rule of thumb used by investors is the "1% Rule," which states that the monthly rent should be at least 1% of the purchase price. While this doesn't guarantee positive cash flow, properties that meet this rule are statistically more likely to generate a profit after expenses are paid.
function calculateCashFlow() {
// Get Input Values
var rent = parseFloat(document.getElementById('monthlyRent').value);
var mortgage = parseFloat(document.getElementById('mortgage').value);
var tax = parseFloat(document.getElementById('propertyTax').value);
var insurance = parseFloat(document.getElementById('insurance').value);
var maintenance = parseFloat(document.getElementById('maintenance').value);
var hoa = parseFloat(document.getElementById('hoa').value);
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value);
var managementRate = parseFloat(document.getElementById('managementFee').value);
// Validation: Check if required fields are numbers
if (isNaN(rent)) rent = 0;
if (isNaN(mortgage)) mortgage = 0;
if (isNaN(tax)) tax = 0;
if (isNaN(insurance)) insurance = 0;
if (isNaN(maintenance)) maintenance = 0;
if (isNaN(hoa)) hoa = 0;
if (isNaN(vacancyRate)) vacancyRate = 0;
if (isNaN(managementRate)) managementRate = 0;
// Logic Calculations
// 1. Calculate Vacancy Cost (Money lost due to empty unit)
// Formula: Rent * (Vacancy Rate / 100)
var vacancyCost = rent * (vacancyRate / 100);
// 2. Calculate Management Fee (Usually based on collected rent, so Rent – Vacancy)
// However, simple calculation usually applies to Gross Rent for estimation
var managementCost = rent * (managementRate / 100);
// 3. Total Monthly Expenses
var totalExpenses = mortgage + tax + insurance + maintenance + hoa + vacancyCost + managementCost;
// 4. Net Monthly Cash Flow
var netMonthlyFlow = rent – totalExpenses;
// 5. Annual Cash Flow
var netAnnualFlow = netMonthlyFlow * 12;
// Display Results
var resultsDiv = document.getElementById('results');
resultsDiv.style.display = 'block';
// Helper for currency formatting
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
document.getElementById('displayIncome').textContent = formatter.format(rent);
document.getElementById('displayVacancy').textContent = formatter.format(vacancyCost);
document.getElementById('displayManagement').textContent = formatter.format(managementCost);
document.getElementById('displayExpenses').textContent = formatter.format(totalExpenses);
var monthlyFlowEl = document.getElementById('monthlyCashFlow');
monthlyFlowEl.textContent = formatter.format(netMonthlyFlow);
var annualFlowEl = document.getElementById('annualCashFlow');
annualFlowEl.textContent = formatter.format(netAnnualFlow);
// Styling for positive/negative flow
if (netMonthlyFlow >= 0) {
monthlyFlowEl.className = 'result-total positive-flow';
annualFlowEl.className = 'positive-flow';
} else {
monthlyFlowEl.className = 'result-total negative-flow';
annualFlowEl.className = 'negative-flow';
}
}