function calculateRentalCashFlow() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('rp_price').value);
var downPercent = parseFloat(document.getElementById('rp_down').value);
var ratePercent = parseFloat(document.getElementById('rp_rate').value);
var years = parseFloat(document.getElementById('rp_term').value);
var monthlyRent = parseFloat(document.getElementById('rp_rent').value);
var annualExpenses = parseFloat(document.getElementById('rp_expenses').value);
// 2. Validation
if (isNaN(price) || isNaN(downPercent) || isNaN(ratePercent) || isNaN(years) || isNaN(monthlyRent) || isNaN(annualExpenses)) {
alert("Please enter valid numbers in all fields.");
return;
}
// 3. Calculation Logic
// Mortgage Details
var downPaymentAmount = price * (downPercent / 100);
var loanAmount = price – downPaymentAmount;
var monthlyRate = (ratePercent / 100) / 12;
var totalPayments = years * 12;
// Standard Mortgage Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var monthlyMortgage = 0;
if (monthlyRate > 0) {
monthlyMortgage = (loanAmount * monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
} else {
monthlyMortgage = loanAmount / totalPayments;
}
// Expenses and Cash Flow
var monthlyOperatingExpenses = annualExpenses / 12;
var totalMonthlyCost = monthlyMortgage + monthlyOperatingExpenses;
var netMonthlyCashFlow = monthlyRent – totalMonthlyCost;
var annualCashFlow = netMonthlyCashFlow * 12;
// ROI (Cash on Cash) = Annual Pre-Tax Cash Flow / Total Cash Invested
// Note: Assuming Total Cash Invested is just the Down Payment for this simple calculator
// In a complex version, we would add closing costs and rehab costs.
var cashInvested = downPaymentAmount;
var cocReturn = 0;
if (cashInvested > 0) {
cocReturn = (annualCashFlow / cashInvested) * 100;
}
// 4. Update UI
// Helper function for currency formatting
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
document.getElementById('res_mortgage').innerText = formatter.format(monthlyMortgage);
document.getElementById('res_expenses').innerText = formatter.format(monthlyOperatingExpenses);
document.getElementById('res_total_cost').innerText = formatter.format(totalMonthlyCost);
// Color coding for cash flow
var cfElement = document.getElementById('res_cashflow');
cfElement.innerText = formatter.format(netMonthlyCashFlow);
cfElement.style.color = netMonthlyCashFlow >= 0 ? '#2c7a7b' : '#c53030';
var acfElement = document.getElementById('res_annual_cf');
acfElement.innerText = formatter.format(annualCashFlow);
acfElement.style.color = annualCashFlow >= 0 ? '#333' : '#c53030';
var cocElement = document.getElementById('res_coc');
cocElement.innerText = cocReturn.toFixed(2) + "%";
cocElement.style.color = cocReturn >= 0 ? '#2c7a7b' : '#c53030';
// Show Results
document.getElementById('rp_results').style.display = 'block';
}
Understanding Rental Property Cash Flow
Investing in real estate is a powerful way to build wealth, but the difference between a successful investment and a financial burden often comes down to one metric: Cash Flow. This Rental Property Cash Flow Calculator helps investors analyze potential deals by breaking down income against debt service and operating expenses.
What is Rental Cash Flow?
Cash flow is the net amount of money left over after all rental income is collected and all expenses are paid. It is calculated using the formula:
Positive cash flow means the property generates profit every month, while negative cash flow implies you are losing money to hold the property.
Key Metrics Explained
Net Monthly Cash Flow: Your pure profit per month. A healthy target for beginners is often $100-$200 per door, depending on the market.
Cash on Cash Return (CoC): This measures the return on the actual cash you invested (down payment). If you put down $50,000 and make $5,000 a year in profit, your CoC is 10%. It allows you to compare real estate returns against stocks or bonds.
Operating Expenses: These are the costs to run the property, excluding the mortgage. Common oversights include vacancy reserves, repairs (CapEx), property management fees, and HOA dues.
How to Use This Calculator for Better Deals
To get the most accurate results from the calculator above, ensure you aren't just guessing on expenses. Here is a guide to the inputs:
Purchase Price & Down Payment: These determine your loan amount. A higher down payment reduces monthly mortgage costs and typically increases cash flow.
Interest Rate: Even a small fluctuation in rates can turn a positive cash flow deal negative. Always check current lender rates.
Annual Operating Expenses: Do not underestimate this. A common "rule of thumb" is the 50% rule, suggesting that 50% of income will go to expenses (excluding mortgage), but for this calculator, try to list specific costs like taxes, insurance, and maintenance estimates.
Example Calculation
Imagine you purchase a property for $200,000 with 20% down ($40,000). Your loan is $160,000 at 6.5% interest for 30 years.
Monthly Mortgage (P&I): ~$1,011
Projected Rent: $1,800
Taxes/Insurance/Repairs (Monthly): ~$500
Total Cost: $1,511
Cash Flow: $1,800 – $1,511 = $289 / month
This results in an annual profit of $3,468, representing an 8.67% Cash on Cash return on your $40,000 investment.