Calculate Taxable Income

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Rental Property ROI & Cash Flow Calculator

Investing in real estate is one of the most proven ways to build long-term wealth. However, the difference between a “good deal” and a “money pit” lies in the numbers. This Rental Property ROI Calculator helps you strip away the emotion and focus on the raw data of your potential investment.

What is Cash on Cash Return?

The Cash on Cash (CoC) return is one of the most important metrics for real estate investors who use financing. It measures the annual cash flow relative to the actual amount of cash you invested (your down payment and closing costs). For example, if you invest $50,000 and receive $5,000 in annual profit, your CoC return is 10%.

Cap Rate vs. Cash Flow

The Cap Rate (Capitalization Rate) represents the property’s natural rate of return without considering financing. It is calculated by dividing the Net Operating Income (NOI) by the purchase price. This is useful for comparing different properties side-by-side regardless of how they are financed. Cash Flow, on the other hand, is the money left in your pocket after every single bill—including the mortgage—is paid.

Example Calculation

Imagine you buy a property for $250,000 with a 20% down payment ($50,000). If the monthly rent is $2,000 and your total expenses (mortgage, taxes, insurance, and maintenance) total $1,600, your monthly cash flow is $400. Annually, that is $4,800. Your Cash on Cash return would be $4,800 divided by $50,000, resulting in a 9.6% return.

Key Factors to Remember

• Vacancy Rates: Never assume 100% occupancy. Most pro-formas use a 5-10% vacancy factor.
• Maintenance: Set aside at least 5-10% of gross rent for repairs and capital expenditures (CapEx) like a new roof or HVAC system.
• Property Management: If you aren’t managing the property yourself, expect to pay 8-12% of monthly rent to a manager.

function calculateROI() {
var price = parseFloat(document.getElementById(“purchasePrice”).value);
var downPercent = parseFloat(document.getElementById(“downPaymentPercent”).value);
var interestRate = parseFloat(document.getElementById(“interestRate”).value);
var term = parseFloat(document.getElementById(“loanTerm”).value);
var rent = parseFloat(document.getElementById(“monthlyRent”).value);
var taxes = parseFloat(document.getElementById(“annualTaxes”).value);
var insurance = parseFloat(document.getElementById(“annualInsurance”).value);
var maintPercent = parseFloat(document.getElementById(“maintenancePercent”).value);
if (isNaN(price) || isNaN(rent) || price 0) {
monthlyMortgage = (loanAmount * monthlyInt) / (1 – Math.pow(1 + monthlyInt, -numPayments));
} else {
monthlyMortgage = loanAmount / numPayments;
}
// Operating Expenses
var monthlyTaxes = taxes / 12;
var monthlyInsurance = insurance / 12;
var monthlyMaint = rent * (maintPercent / 100);
var totalExpenses = monthlyTaxes + monthlyInsurance + monthlyMaint;
// Cash Flow
var monthlyCashFlow = rent – monthlyMortgage – totalExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// ROI Metrics
var annualGrossRent = rent * 12;
var annualOperatingExpenses = totalExpenses * 12;
var noi = annualGrossRent – annualOperatingExpenses;
var capRate = (noi / price) * 100;
var cocReturn = (annualCashFlow / downPayment) * 100;
// Display Results
document.getElementById(“resMortgage”).innerText = “$” + monthlyMortgage.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById(“resExpenses”).innerText = “$” + (monthlyMortgage + totalExpenses).toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById(“resCashFlow”).innerText = “$” + monthlyCashFlow.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById(“resCapRate”).innerText = capRate.toFixed(2) + “%”;
document.getElementById(“resCoC”).innerText = cocReturn.toFixed(2) + “%”;
// Color coding cash flow
if (monthlyCashFlow < 0) {
document.getElementById("resCashFlow").style.color = "#e74c3c";
} else {
document.getElementById("resCashFlow").style.color = "#27ae60";
}
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