Analyze the potential profitability of your real estate investment.
Income
Fixed Expenses
Variable Expenses (%)
Gross Monthly Income:$0.00
Total Monthly Expenses:$0.00
Net Monthly Cash Flow:$0.00
*Negative values indicate a loss per month.
Understanding Rental Property Cash Flow
Cash flow is the lifeblood of any rental property investment. It represents the net amount of cash moving in and out of your investment business. Positive cash flow means your property is generating income after all expenses are paid, while negative cash flow implies you are losing money every month to hold the asset.
How to Calculate Cash Flow
The formula for calculating rental property cash flow is straightforward but requires accuracy regarding expenses:
Cash Flow = Gross Income – Total Expenses
Key Components of the Calculator
Gross Income: This includes your monthly rent plus any additional income streams such as laundry facilities, parking fees, or storage rental.
Fixed Expenses: These are costs that generally do not fluctuate month-to-month, including your mortgage principal and interest, property taxes, insurance premiums, and HOA fees.
Variable Expenses: These are often estimated as percentages of the rent.
Vacancy: Funds set aside for periods when the property is empty.
Repairs: Ongoing minor fixes (leaky faucets, painting).
CapEx (Capital Expenditures): Savings for big-ticket items like a new roof or HVAC system.
Property Management: The fee paid to a manager (typically 8-10% of rent) if you do not self-manage.
What is a Good Cash Flow?
While "good" is subjective, many investors aim for at least $100 to $200 per door, per month in pure cash flow. However, this depends on your strategy. Some investors accept lower cash flow in exchange for high appreciation potential, while others prioritize immediate income.
Why You Must Account for CapEx
Novice investors often make the mistake of ignoring Capital Expenditures (CapEx). Even if your roof is fine today, it will eventually need replacing. Allocating 5-10% of your monthly rent into a reserve fund ensures that when a $10,000 expense arises, it doesn't destroy your annual returns.
function calculateCashFlow() {
// Get Income Inputs
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var otherIncome = parseFloat(document.getElementById('otherIncome').value) || 0;
// Get Fixed Expense Inputs
var mortgagePayment = parseFloat(document.getElementById('mortgagePayment').value) || 0;
var propertyTax = parseFloat(document.getElementById('propertyTax').value) || 0;
var insurance = parseFloat(document.getElementById('insurance').value) || 0;
var hoaFees = parseFloat(document.getElementById('hoaFees').value) || 0;
// Get Variable Expense Inputs (Percentages)
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value) || 0;
var repairsRate = parseFloat(document.getElementById('repairsRate').value) || 0;
var capexRate = parseFloat(document.getElementById('capexRate').value) || 0;
var managementRate = parseFloat(document.getElementById('managementRate').value) || 0;
// Calculate Gross Income
var grossIncome = monthlyRent + otherIncome;
// Calculate Variable Expenses (based on Gross Income or Rent? typically Rent, but Gross is safer for total revenue)
// Standard practice: Percentages usually apply to Rent, but Management applies to collected income.
// For simplicity in this tool, we apply percentages to the Total Monthly Rent.
var vacancyCost = monthlyRent * (vacancyRate / 100);
var repairsCost = monthlyRent * (repairsRate / 100);
var capexCost = monthlyRent * (capexRate / 100);
var managementCost = monthlyRent * (managementRate / 100);
var totalVariableExpenses = vacancyCost + repairsCost + capexCost + managementCost;
var totalFixedExpenses = mortgagePayment + propertyTax + insurance + hoaFees;
var totalExpenses = totalFixedExpenses + totalVariableExpenses;
// Calculate Cash Flow
var cashFlow = grossIncome – totalExpenses;
// Display Results
var resultBox = document.getElementById('resultBox');
var finalRow = document.getElementById('finalRow');
resultBox.style.display = 'block';
document.getElementById('displayGrossIncome').innerHTML = '$' + grossIncome.toFixed(2);
document.getElementById('displayTotalExpenses').innerHTML = '$' + totalExpenses.toFixed(2);
var cashFlowElement = document.getElementById('displayCashFlow');
cashFlowElement.innerHTML = '$' + cashFlow.toFixed(2);
// Styling for positive/negative cash flow
if (cashFlow >= 0) {
finalRow.classList.remove('negative');
cashFlowElement.style.color = '#27ae60';
} else {
finalRow.classList.add('negative');
cashFlowElement.style.color = '#c0392b';
}
}