function calculateCashFlow() {
// Get Inputs
var price = parseFloat(document.getElementById('rp_price').value) || 0;
var closing = parseFloat(document.getElementById('rp_closing').value) || 0;
var down = parseFloat(document.getElementById('rp_down').value) || 0;
var rate = parseFloat(document.getElementById('rp_rate').value) || 0;
var term = parseFloat(document.getElementById('rp_term').value) || 0;
var rent = parseFloat(document.getElementById('rp_rent').value) || 0;
var annualTax = parseFloat(document.getElementById('rp_tax').value) || 0;
var annualIns = parseFloat(document.getElementById('rp_insurance').value) || 0;
var monthlyHOA = parseFloat(document.getElementById('rp_hoa').value) || 0;
var monthlyMaint = parseFloat(document.getElementById('rp_maintenance').value) || 0;
// Validations
if (price <= 0 || term 0) {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
} else {
mortgagePayment = loanAmount / numPayments;
}
// 2. Monthly Expenses Breakdown
var monthlyTax = annualTax / 12;
var monthlyIns = annualIns / 12;
var totalMonthlyFixedExpenses = monthlyTax + monthlyIns + monthlyHOA + monthlyMaint;
var totalMonthlyExpenses = mortgagePayment + totalMonthlyFixedExpenses;
// 3. Cash Flow
var monthlyCashFlow = rent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// 4. Net Operating Income (NOI)
// NOI = Income – Operating Expenses (excludes mortgage interest/principal)
// Operating Expenses = Tax + Ins + HOA + Maintenance
var monthlyNOI = rent – totalMonthlyFixedExpenses;
var annualNOI = monthlyNOI * 12;
// 5. Returns
var totalInvestment = down + closing;
var cocReturn = 0;
if (totalInvestment > 0) {
cocReturn = (annualCashFlow / totalInvestment) * 100;
}
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
// Formatting Helpers
var currencyFmt = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
var percentFmt = new Intl.NumberFormat('en-US', { style: 'decimal', maximumFractionDigits: 2 });
// Update UI
document.getElementById('res_cashflow').innerHTML = currencyFmt.format(monthlyCashFlow);
document.getElementById('res_cashflow').className = "rp-result-value rp-highlight " + (monthlyCashFlow >= 0 ? "rp-positive" : "rp-negative");
document.getElementById('res_noi').innerText = currencyFmt.format(monthlyNOI);
document.getElementById('res_mortgage').innerText = currencyFmt.format(mortgagePayment);
document.getElementById('res_expenses').innerText = currencyFmt.format(totalMonthlyExpenses);
document.getElementById('res_coc').innerText = percentFmt.format(cocReturn) + "%";
document.getElementById('res_coc').className = "rp-result-value " + (cocReturn >= 0 ? "rp-positive" : "rp-negative");
document.getElementById('res_cap').innerText = percentFmt.format(capRate) + "%";
document.getElementById('res_investment').innerText = currencyFmt.format(totalInvestment);
document.getElementById('rp_results').style.display = "block";
}
Understanding Rental Property Cash Flow
Cash flow is the lifeblood of any rental property investment. It represents the net amount of cash moving into or out of your investment each month. Positive cash flow means your property is generating income after all expenses are paid, while negative cash flow implies the property costs you money to hold.
How to Calculate Rental Cash Flow
The basic formula for calculating monthly rental cash flow is straightforward:
Gross Income: Total rent collected plus any other income (laundry, parking, etc.).
Minus Operating Expenses: Taxes, insurance, HOA fees, management fees, repairs, vacancy reserves, and capital expenditures (CapEx).
Minus Debt Service: Your monthly mortgage payment (principal and interest).
Equals Cash Flow: The remaining profit.
Key Investment Metrics Defined
Using our Rental Property Cash Flow Calculator helps you visualize several critical metrics:
1. Net Operating Income (NOI)
NOI is the profitability of the property before debt service (mortgage) is considered. It is calculated by subtracting all operating expenses from total income. Lenders use this to determine how risky a property is.
2. Cash on Cash Return (CoC)
This is arguably the most important metric for investors. It measures the annual return on the actual cash you invested (down payment + closing costs), rather than the total loan amount. A CoC of 8-12% is generally considered solid in many markets.
3. Cap Rate (Capitalization Rate)
Cap Rate measures 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 Annual NOI by the Property Value. It helps compare properties regardless of financing.
Why Include CapEx and Vacancy?
Many new investors make the mistake of calculating cash flow based only on Rent minus Mortgage, Taxes, and Insurance. However, roofs eventually need replacing (CapEx) and tenants eventually move out (Vacancy). Prudent investors set aside a percentage of rent (often 5-10% each) to cover these inevitable future costs.