function calculateRentalCashFlow() {
// Get Inputs
var price = parseFloat(document.getElementById('rp_price').value) || 0;
var downPercent = parseFloat(document.getElementById('rp_down_percent').value) || 0;
var interestRate = parseFloat(document.getElementById('rp_rate').value) || 0;
var termYears = parseFloat(document.getElementById('rp_term').value) || 0;
var monthlyRent = parseFloat(document.getElementById('rp_rent').value) || 0;
var monthlyTaxIns = parseFloat(document.getElementById('rp_tax_ins').value) || 0;
var maintenancePercent = parseFloat(document.getElementById('rp_maintenance').value) || 0;
var vacancyPercent = parseFloat(document.getElementById('rp_vacancy').value) || 0;
var managementPercent = parseFloat(document.getElementById('rp_management').value) || 0;
var capex = parseFloat(document.getElementById('rp_capex').value) || 0;
// Loan Calculations
var downPayment = price * (downPercent / 100);
var loanAmount = price – downPayment;
var monthlyRate = (interestRate / 100) / 12;
var totalPayments = termYears * 12;
var monthlyMortgage = 0;
if (interestRate > 0) {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
} else {
monthlyMortgage = loanAmount / totalPayments;
}
// Operating Expenses Calculation
var vacancyCost = monthlyRent * (vacancyPercent / 100);
var maintenanceCost = monthlyRent * (maintenancePercent / 100);
var managementCost = monthlyRent * (managementPercent / 100);
var operatingExpenses = monthlyTaxIns + maintenanceCost + managementCost + vacancyCost + capex;
var totalMonthlyExpenses = operatingExpenses + monthlyMortgage;
// Income Metrics
var noi = (monthlyRent – vacancyCost) – (monthlyTaxIns + maintenanceCost + managementCost + capex); // Net Operating Income (Monthly)
var cashFlow = monthlyRent – totalMonthlyExpenses;
// Annual Metrics for ROI
var annualCashFlow = cashFlow * 12;
var totalInvestment = downPayment + (price * 0.03); // Assuming 3% closing costs roughly
// Just using Down Payment for Cash on Cash to keep it standard, usually closing costs are added though.
// Let's stick to Down Payment for simplicity unless specified, but strictly speaking CoC includes closing costs.
// I'll calculate strictly on Down Payment to avoid assuming closing cost inputs.
var cashOnCash = 0;
if (downPayment > 0) {
cashOnCash = (annualCashFlow / downPayment) * 100;
}
var annualNOI = noi * 12;
var capRate = (annualNOI / price) * 100;
// Formatting Output
var currencyFmt = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
document.getElementById('rp_mortgage_res').innerText = currencyFmt.format(monthlyMortgage);
document.getElementById('rp_total_expenses_res').innerText = currencyFmt.format(totalMonthlyExpenses);
document.getElementById('rp_noi_res').innerText = currencyFmt.format(noi);
var cfElement = document.getElementById('rp_cashflow_res');
cfElement.innerText = currencyFmt.format(cashFlow);
if(cashFlow >= 0) {
cfElement.className = "rp-result-value rp-positive";
} else {
cfElement.className = "rp-result-value rp-negative";
}
document.getElementById('rp_coc_res').innerText = cashOnCash.toFixed(2) + "%";
document.getElementById('rp_cap_res').innerText = capRate.toFixed(2) + "%";
// Show Results
document.getElementById('rp_results_area').style.display = "block";
}
Understanding Rental Property Cash Flow Analysis
Investing in real estate is one of the most reliable ways to build wealth, but the success of an investment property hinges on the numbers. A Rental Property Cash Flow Calculator is an essential tool for investors to determine whether a potential property will generate income (positive cash flow) or cost money to hold (negative cash flow).
What is Cash Flow in Real Estate?
Cash flow is the net amount of cash moving into or out of an investment. In the context of a rental property, it is calculated as:
Cash Flow = Total Rental Income – Total Expenses
Total expenses include the mortgage (principal and interest) and operating expenses like taxes, insurance, maintenance, and vacancy allowances. Positive cash flow means the property pays for itself and puts money in your pocket every month.
Key Metrics Explained
NOI (Net Operating Income): This represents the profitability of the property before mortgage payments are considered. It is calculated by subtracting operating expenses from revenue.
Cash on Cash ROI: This metric measures the return on the actual cash you invested (down payment). It is often considered the most important metric for investors using leverage.
Cap Rate (Capitalization Rate): This indicates the rate of return on a real estate investment property based on the income that the property is expected to generate, regardless of financing.
Estimating Expenses Accurately
One of the most common mistakes new investors make is underestimating expenses. When using the calculator above, ensure you account for:
Vacancy Rate: Properties won't be rented 100% of the time. A standard conservative estimate is 5-8% (about 3 weeks of vacancy per year).
CapEx (Capital Expenditures): Big-ticket items like roofs, HVAC systems, and water heaters eventually need replacement. Setting aside money monthly ($100-$200) ensures you aren't caught off guard.
Property Management: Even if you plan to self-manage, it is wise to calculate the numbers with a 10% management fee to ensure the deal works if you decide to hire a professional later.
What is a "Good" Cash Flow?
While this varies by market and strategy, many investors look for at least $100 to $200 per door in monthly positive cash flow for residential rentals. Additionally, a Cash on Cash ROI of 8-12% is generally considered a solid return in the stock market comparison, though many real estate investors aim higher.