Rental Property Cash Flow & ROI Calculator
body {
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Investment Performance
Monthly Cash Flow
$0.00
Cash on Cash Return
0.00%
Cap Rate
0.00%
Net Operating Income (NOI)
$0.00 / yr
Total Cash Invested
$0.00
Monthly Breakdown
Effective Income
$0.00
Operating Expenses
$0.00
Mortgage Payment (P&I)
$0.00
Understanding Rental Property Cash Flow
Investing in real estate is a powerful way to build wealth, but the difference between a profitable investment and a liability often comes down to the numbers. This Rental Property Cash Flow Calculator helps investors analyze potential deals by breaking down income, expenses, and financing costs to determine the true return on investment (ROI).
Key Metrics Explained
When analyzing a rental property, there are three critical metrics you must understand:
- Cash Flow: This is the profit you take home every month after paying all operating expenses and the mortgage. Positive cash flow is essential for long-term sustainability. It acts as a safety net against vacancies and repairs.
- Cash on Cash Return (CoC): This metric calculates the annual return on the actual cash you invested (down payment + closing costs). Unlike general ROI, CoC gives you a specific picture of how hard your money is working compared to alternative investments like the stock market.
- Cap Rate (Capitalization Rate): The Cap Rate measures the property's natural rate of return assuming you bought it in cash. It is calculated by dividing the Net Operating Income (NOI) by the purchase price. It helps compare properties regardless of financing methods.
How to Calculate Rental Property Profitability
The calculation follows a specific hierarchy of numbers:
- Gross Income: Start with the total potential monthly rent.
- Effective Gross Income: Subtract a percentage for vacancy (time the property sits empty). A standard safe estimate is 5-8%.
- Net Operating Income (NOI): Subtract all operating expenses from the effective income. Operating expenses include taxes, insurance, HOA fees, maintenance, and management fees. Note: Mortgage payments are not included in NOI.
- Cash Flow: Finally, subtract the monthly mortgage debt service (Principal & Interest) from the NOI. The remainder is your pre-tax cash flow.
Example Calculation
Imagine purchasing a single-family home for $250,000 with a 20% down payment ($50,000). You rent it for $2,200/month.
If your operating expenses (taxes, insurance, repairs) total $600/month and your mortgage payment is roughly $1,264/month (at 6.5% interest), your math looks like this:
- Income: $2,200
- Expenses: -$600
- NOI: $1,600
- Mortgage: -$1,264
- Monthly Cash Flow: $336
This results in an annual cash flow of $4,032. Divided by your initial investment of roughly $55,000 (down payment + closing costs), your Cash on Cash return would be approximately 7.3%.
function calculateRental() {
// 1. Get Inputs
var price = parseFloat(document.getElementById('purchasePrice').value) || 0;
var downPay = parseFloat(document.getElementById('downPayment').value) || 0;
var closing = parseFloat(document.getElementById('closingCosts').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 vacancyPct = parseFloat(document.getElementById('vacancyRate').value) || 0;
var taxAnnual = parseFloat(document.getElementById('taxAnnual').value) || 0;
var insAnnual = parseFloat(document.getElementById('insuranceAnnual').value) || 0;
var hoaAnnual = parseFloat(document.getElementById('hoaAnnual').value) || 0;
var maintAnnual = parseFloat(document.getElementById('maintenanceAnnual').value) || 0;
var mgmtPct = parseFloat(document.getElementById('mgmtFee').value) || 0;
// 2. Calculate Mortgage
var loanAmount = price – downPay;
var monthlyRate = rate / 100 / 12;
var numPayments = term * 12;
var mortgagePayment = 0;
if (loanAmount > 0 && rate > 0 && term > 0) {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
}
// 3. Calculate Income & Vacancy
var vacancyLoss = rent * (vacancyPct / 100);
var effectiveIncome = rent – vacancyLoss;
// 4. Calculate Expenses
// Mgmt fee is typically based on collected rent (effective income)
var mgmtCost = effectiveIncome * (mgmtPct / 100);
var otherMonthlyExp = (taxAnnual + insAnnual + hoaAnnual + maintAnnual) / 12;
var totalOperatingExp = otherMonthlyExp + mgmtCost;
// 5. Calculate Metrics
var monthlyNOI = effectiveIncome – totalOperatingExp;
var annualNOI = monthlyNOI * 12;
var monthlyCashFlow = monthlyNOI – mortgagePayment;
var annualCashFlow = monthlyCashFlow * 12;
var totalInvested = downPay + closing;
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
var cocReturn = 0;
if (totalInvested > 0) {
cocReturn = (annualCashFlow / totalInvested) * 100;
}
// 6. Update DOM
// Formatting helper
var fmtMoney = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
var fmtPct = new Intl.NumberFormat('en-US', { style: 'percent', minimumFractionDigits: 2, maximumFractionDigits: 2 });
document.getElementById('resCashFlow').innerText = fmtMoney.format(monthlyCashFlow);
// Style Cash Flow
var cfEl = document.getElementById('resCashFlow');
if (monthlyCashFlow >= 0) {
cfEl.classList.remove('highlight-negative');
cfEl.classList.add('highlight-positive');
} else {
cfEl.classList.remove('highlight-positive');
cfEl.classList.add('highlight-negative');
}
document.getElementById('resCoc').innerText = fmtPct.format(cocReturn / 100);
document.getElementById('resCap').innerText = fmtPct.format(capRate / 100);
document.getElementById('resNoiAnnual').innerText = fmtMoney.format(annualNOI) + " / yr";
document.getElementById('resInvested').innerText = fmtMoney.format(totalInvested);
document.getElementById('resEffIncome').innerText = fmtMoney.format(effectiveIncome);
document.getElementById('resOpExp').innerText = fmtMoney.format(totalOperatingExp);
document.getElementById('resMortgage').innerText = fmtMoney.format(mortgagePayment);
}
// Initialize on load
window.onload = function() {
calculateRental();
};