Calculate the Periodic Interest Rate in Cell E3

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Rental Property Cash Flow Calculator

Investment Summary

function calculateRentalFlow() { var rent = parseFloat(document.getElementById('monthlyRent').value) || 0; var mortgage = parseFloat(document.getElementById('mortgagePayment').value) || 0; var taxes = (parseFloat(document.getElementById('annualTaxes').value) || 0) / 12; var insurance = (parseFloat(document.getElementById('annualInsurance').value) || 0) / 12; var maintenancePerc = parseFloat(document.getElementById('maintenanceRate').value) || 0; var vacancyPerc = parseFloat(document.getElementById('vacancyRate').value) || 0; var managementPerc = parseFloat(document.getElementById('managementRate').value) || 0; var other = parseFloat(document.getElementById('otherExpenses').value) || 0; var vacancyLoss = rent * (vacancyPerc / 100); var effectiveGrossIncome = rent – vacancyLoss; var maintenanceCost = rent * (maintenancePerc / 100); var managementCost = rent * (managementPerc / 100); var totalOperatingExpenses = taxes + insurance + maintenanceCost + managementCost + other; var netOperatingIncome = effectiveGrossIncome – totalOperatingExpenses; var monthlyCashFlow = netOperatingIncome – mortgage; var annualCashFlow = monthlyCashFlow * 12; var resultArea = document.getElementById('resultArea'); var output = document.getElementById('outputDetails'); resultArea.style.display = 'block'; var cashFlowColor = monthlyCashFlow >= 0 ? '#27ae60' : '#e74c3c'; output.innerHTML = "
Potential Gross Rent: $" + rent.toFixed(2) + "
" + "
Vacancy Loss: -$" + vacancyLoss.toFixed(2) + "
" + "
Operating Expenses: -$" + totalOperatingExpenses.toFixed(2) + "
" + "
Net Operating Income (NOI): $" + netOperatingIncome.toFixed(2) + "
" + "
Mortgage Payment: -$" + mortgage.toFixed(2) + "
" + "
Monthly Cash Flow: $" + monthlyCashFlow.toFixed(2) + "
" + "
Annual Cash Flow: $" + annualCashFlow.toFixed(2) + "
"; }

How to Calculate Rental Property Cash Flow

Understanding the true rental property cash flow is the difference between a profitable investment and a financial burden. Many new investors make the mistake of only subtracting the mortgage from the rent, forgetting "hidden" costs like vacancy, capital expenditures, and property management.

The Cash Flow Formula

To find your net cash flow, we use a simple tiered calculation:

  1. Gross Potential Income: The total rent you expect if the unit is occupied 100% of the time.
  2. Effective Gross Income: Gross Rent minus Vacancy Allowance (usually 5-10%).
  3. Net Operating Income (NOI): Effective Gross Income minus Operating Expenses (Taxes, Insurance, Utilities, Repairs).
  4. Cash Flow: NOI minus Debt Service (Mortgage Principal and Interest).

Key Expenses to Consider

  • Maintenance & Repairs: Even if a property is new, experts recommend setting aside 10% of the rent for future repairs.
  • Property Management: Even if you manage it yourself now, you should factor in the 8-12% fee to ensure the deal works as a passive investment later.
  • Capital Expenditures (CapEx): Long-term replacement costs for big items like roofs, HVAC systems, and water heaters.

Realistic Example

Imagine you purchase a single-family home for $250,000:

  • Monthly Rent: $2,200
  • Mortgage (P&I): $1,250
  • Taxes & Insurance: $350/mo
  • Vacancy (5%): $110
  • Maintenance (10%): $220
  • Net Monthly Cash Flow: $270

In this scenario, while the "rent minus mortgage" looks like $950 in profit, the actual cash hitting your pocket after expenses is $270 per month. This is why using a dedicated calculator is essential for real estate due diligence.

Frequently Asked Questions

What is a good cash flow for a rental property?

Most investors aim for a minimum of $100 to $300 per door per month. However, this varies based on your total cash invested and the market's appreciation potential.

Is NOI the same as Cash Flow?

No. Net Operating Income (NOI) does not include your mortgage payment. Cash Flow is what remains after the mortgage is paid.

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