function calculateCashFlow() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('purchasePrice').value) || 0;
var down = parseFloat(document.getElementById('downPayment').value) || 0;
var rate = parseFloat(document.getElementById('interestRate').value) || 0;
var years = parseFloat(document.getElementById('loanTerm').value) || 0;
var rent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var vacancy = parseFloat(document.getElementById('vacancyRate').value) || 0;
var annualTax = parseFloat(document.getElementById('propertyTax').value) || 0;
var annualIns = parseFloat(document.getElementById('insurance').value) || 0;
var maintPercent = parseFloat(document.getElementById('maintenance').value) || 0;
var hoa = parseFloat(document.getElementById('hoaFees').value) || 0;
// 2. Calculate Mortgage (P&I)
var loanAmount = price – down;
var monthlyRate = (rate / 100) / 12;
var totalPayments = years * 12;
var monthlyMortgage = 0;
if (loanAmount > 0 && rate > 0) {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
} else if (loanAmount > 0 && rate === 0) {
monthlyMortgage = loanAmount / totalPayments;
}
// 3. Calculate Operational Costs
var monthlyTax = annualTax / 12;
var monthlyIns = annualIns / 12;
var maintenanceCost = rent * (maintPercent / 100);
var vacancyCost = rent * (vacancy / 100);
// Total Operating Expenses (excluding Mortgage for NOI calc, but usually Vacancy is subtracted from Gross Income)
// Standard formula: Gross Potential Rent – Vacancy = Effective Gross Income.
// Effective Gross Income – Operating Expenses = NOI.
// Cash Flow = NOI – Debt Service.
var effectiveGrossIncome = rent – vacancyCost;
var operatingExpenses = monthlyTax + monthlyIns + maintenanceCost + hoa;
var totalExpensesForCashFlow = operatingExpenses + monthlyMortgage;
// 4. Key Metrics
var monthlyCashFlow = effectiveGrossIncome – totalExpensesForCashFlow;
var annualNOI = (effectiveGrossIncome – operatingExpenses) * 12;
var capRate = (price > 0) ? (annualNOI / price) * 100 : 0;
// Cash on Cash Return = Annual Cash Flow / Total Cash Invested (assuming Down Payment is total invested here)
var annualCashFlow = monthlyCashFlow * 12;
var cocReturn = (down > 0) ? (annualCashFlow / down) * 100 : 0;
// 5. Display Results
document.getElementById('resMortgage').innerText = "$" + monthlyMortgage.toFixed(2);
document.getElementById('resExpenses').innerText = "$" + totalExpensesForCashFlow.toFixed(2);
document.getElementById('resNOI').innerText = "$" + annualNOI.toFixed(2);
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + "%";
var cocElem = document.getElementById('resCOC');
cocElem.innerText = cocReturn.toFixed(2) + "%";
if(cocReturn = 0 ? "+" : "") + "$" + monthlyCashFlow.toFixed(2);
if (monthlyCashFlow >= 0) {
flowElem.className = "result-value highlight";
} else {
flowElem.className = "result-value neg-highlight";
}
document.getElementById('results').style.display = "block";
}
Understanding Rental Property Cash Flow
Calculating cash flow is the single most important step in analyzing a potential real estate investment. Positive cash flow ensures that the property pays for itself while putting money in your pocket every month, whereas negative cash flow can quickly drain your reserves.
How This Calculator Works
This Rental Property Cash Flow Calculator takes into account all major variables required to analyze a deal accurately:
Gross Income: Your total monthly rent.
Vacancy Loss: Properties aren't rented 100% of the time. We deduct a percentage (usually 5-8%) to account for turnover periods.
Operating Expenses: This includes taxes, insurance, HOA fees, and maintenance reserves. Many new investors make the mistake of ignoring maintenance costs, which should typically be estimated at 10-15% of the rent.
Debt Service: The principal and interest payments on your mortgage.
Key Metrics Explained
Beyond simple monthly cash flow, this tool calculates two vital metrics for comparing investments:
1. Cap Rate (Capitalization Rate)
Calculated as Net Operating Income (NOI) / Purchase Price. The Cap Rate measures the property's natural rate of return without considering mortgage financing. It helps you compare the profitability of the property itself against other properties, regardless of how you pay for them.
2. Cash on Cash Return (CoC)
Calculated as Annual Cash Flow / Total Cash Invested. This metric tells you how hard your specific dollar investment is working. If you put down $50,000 and the property generates $5,000 a year in profit after all expenses, your Cash on Cash return is 10%. This is often the most important metric for investors using leverage.
How to Improve Cash Flow
If your calculation shows negative or low cash flow, consider these strategies:
Increase Rent: Are you charging market rates? Small increases can significantly impact the bottom line.
Decrease Expenses: Shop around for cheaper insurance, appeal property tax assessments, or manage the property yourself to save on management fees (though this costs time).
Larger Down Payment: Putting more money down reduces your monthly mortgage payment, instantly increasing monthly cash flow, though it may lower your Cash on Cash return.
Disclaimer: This calculator is for educational purposes only and does not constitute financial advice. Always consult with a real estate professional or financial advisor before making investment decisions.