function calculateRental() {
// 1. Get Inputs
var price = parseFloat(document.getElementById('rcPurchasePrice').value);
var downPayment = parseFloat(document.getElementById('rcDownPayment').value);
var closingCosts = parseFloat(document.getElementById('rcClosingCosts').value);
var interestRate = parseFloat(document.getElementById('rcInterestRate').value);
var loanTerm = parseInt(document.getElementById('rcLoanTerm').value);
var rent = parseFloat(document.getElementById('rcRent').value);
var taxYear = parseFloat(document.getElementById('rcPropTax').value);
var insYear = parseFloat(document.getElementById('rcInsurance').value);
var hoa = parseFloat(document.getElementById('rcHOA').value);
var maintPercent = parseFloat(document.getElementById('rcMaintenance').value);
var vacancyPercent = parseFloat(document.getElementById('rcVacancy').value);
// Validation
if (isNaN(price) || isNaN(rent) || isNaN(taxYear) || isNaN(insYear)) {
alert("Please fill in all required fields (Purchase Price, Rent, Taxes, Insurance).");
return;
}
// Set defaults for optional fields if empty but valid numbers elsewhere
if (isNaN(downPayment)) downPayment = 0;
if (isNaN(closingCosts)) closingCosts = 0;
if (isNaN(hoa)) hoa = 0;
if (isNaN(maintPercent)) maintPercent = 0;
if (isNaN(vacancyPercent)) vacancyPercent = 0;
// 2. Calculations
// Loan Calculation
var loanAmount = price – downPayment;
var monthlyMortgage = 0;
if (loanTerm > 0 && loanAmount > 0 && !isNaN(interestRate)) {
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
// Monthly Expenses Breakdown
var taxMonth = taxYear / 12;
var insMonth = insYear / 12;
var maintenanceCost = rent * (maintPercent / 100);
var vacancyCost = rent * (vacancyPercent / 100);
var totalOpExpenses = taxMonth + insMonth + hoa + maintenanceCost + vacancyCost;
var totalExpenses = totalOpExpenses + monthlyMortgage;
// Cash Flow
var monthlyCashFlow = rent – totalExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// NOI (Net Operating Income)
// NOI = (Gross Income – Vacancy) – Operating Expenses (Excluding Debt Service)
var grossAnnualIncome = rent * 12;
var annualVacancy = grossAnnualIncome * (vacancyPercent / 100);
var annualOpExpenses = totalOpExpenses * 12; // This includes vacancy cost calculated above? No, totalOpExpenses included vacancyCost.
// Standard definition: NOI = Income – OpEx.
var noi = (grossAnnualIncome) – (annualOpExpenses);
// Note: annualOpExpenses includes the vacancy deduction we calculated in monthly OpEx.
// Cap Rate = NOI / Purchase Price
var capRate = (noi / price) * 100;
// Cash on Cash Return = Annual Cash Flow / Total Cash Invested
var totalCashInvested = downPayment + closingCosts;
var cocReturn = 0;
if (totalCashInvested > 0) {
cocReturn = (annualCashFlow / totalCashInvested) * 100;
} else if (loanAmount === 0 && price > 0) {
// If cash purchase with no closing costs listed, total invested is price
totalCashInvested = price + closingCosts;
cocReturn = (annualCashFlow / totalCashInvested) * 100;
}
// 3. Display Results
document.getElementById('rc-results').style.display = 'block';
// Formatting Helper
var formatCurrency = function(num) {
return '$' + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
};
var formatPercent = function(num) {
return num.toFixed(2) + '%';
};
// Output Values
var cfElement = document.getElementById('resCashFlow');
cfElement.innerHTML = formatCurrency(monthlyCashFlow);
if (monthlyCashFlow >= 0) {
cfElement.className = "rc-result-value rc-highlight";
} else {
cfElement.className = "rc-result-value rc-highlight-negative";
}
document.getElementById('resCoC').innerHTML = formatPercent(cocReturn);
document.getElementById('resCapRate').innerHTML = formatPercent(capRate);
document.getElementById('resMortgage').innerHTML = formatCurrency(monthlyMortgage);
document.getElementById('resTotalExp').innerHTML = formatCurrency(totalExpenses);
document.getElementById('resNOI').innerHTML = formatCurrency(noi);
}
Understanding Rental Property Analysis
Investing in real estate is a powerful way to build wealth, but simply buying a property and renting it out doesn't guarantee a profit. To succeed, investors must analyze the numbers objectively. This Rental Property Cash Flow Calculator helps you determine the viability of an investment by breaking down income, expenses, and returns.
What is Cash Flow?
Cash flow is the net amount of cash moving in and out of your rental business. Positive cash flow means your property generates more income than it costs to operate, putting money in your pocket every month. Negative cash flow means you are losing money to hold the property.
Cash on Cash Return (CoC): This measures the annual return on the actual cash you invested (down payment + closing costs). It is often considered the most important metric for investors using leverage. A CoC of 8-12% is generally considered good in many markets.
Cap Rate (Capitalization Rate): This metric calculates the rate of return on a real estate investment property based on the income that the property is expected to generate. It is calculated by dividing the Net Operating Income (NOI) by the current market value (Purchase Price). It helps compare properties regardless of financing.
NOI (Net Operating Income): This represents the profitability of the property before adding in any costs from financing (mortgage) or taxes.
Estimating Expenses Accurately
One of the biggest mistakes new investors make is underestimating expenses. Always account for:
Vacancy: Properties will not be occupied 100% of the time. Use 5-8% as a conservative estimate.
Maintenance: Roofs leak and toilets break. Setting aside 5-10% of monthly rent ensures you have funds for repairs.
CapEx (Capital Expenditures): These are major expenses like replacing a furnace or roof. While not monthly, they should be budgeted for annually.
How to Use This Calculator
Enter your purchase details, loan terms, and expected rental income. Be sure to include realistic estimates for taxes and insurance, which can vary significantly by location. Adjust the vacancy and maintenance percentages based on the age and condition of the property to see how they impact your bottom line.