function calculateRental() {
// Get Inputs
var price = parseFloat(document.getElementById('rc-price').value) || 0;
var down = parseFloat(document.getElementById('rc-down').value) || 0;
var rate = parseFloat(document.getElementById('rc-rate').value) || 0;
var term = parseFloat(document.getElementById('rc-term').value) || 0;
var closing = parseFloat(document.getElementById('rc-closing').value) || 0;
var rent = parseFloat(document.getElementById('rc-rent').value) || 0;
var vacancyPct = parseFloat(document.getElementById('rc-vacancy').value) || 0;
var taxYear = parseFloat(document.getElementById('rc-tax').value) || 0;
var insYear = parseFloat(document.getElementById('rc-insurance').value) || 0;
var hoaMo = parseFloat(document.getElementById('rc-hoa').value) || 0;
var maintPct = parseFloat(document.getElementById('rc-maint').value) || 0;
var mgmtPct = parseFloat(document.getElementById('rc-mgmt').value) || 0;
// 1. Calculate Mortgage
var loanAmount = price – down;
var monthlyRate = (rate / 100) / 12;
var numPayments = term * 12;
var mortgagePayment = 0;
if (rate === 0) {
mortgagePayment = loanAmount / numPayments;
} else {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
}
// 2. Calculate Operating Expenses
var vacancyCost = rent * (vacancyPct / 100);
var maintCost = rent * (maintPct / 100);
var mgmtCost = rent * (mgmtPct / 100);
var taxMo = taxYear / 12;
var insMo = insYear / 12;
var totalOpEx = taxMo + insMo + hoaMo + vacancyCost + maintCost + mgmtCost;
// 3. Calculate NOI
var effectiveGrossIncome = rent – vacancyCost; // NOI usually excludes vacancy from Gross, or treats it as expense. Standard is Gross – Vacancy – Expenses.
// Simplified: NOI = (Rent – Vacancy) – (OpEx excluding vacancy).
// Let's stick to: Revenue = Rent. Expenses = All listed above.
var noiMo = rent – totalOpEx;
var noiAnnual = noiMo * 12;
// 4. Cash Flow
var cashFlowMo = noiMo – mortgagePayment;
var cashFlowAnnual = cashFlowMo * 12;
// 5. Returns
var totalCashInvested = down + closing;
var cocReturn = 0;
if (totalCashInvested > 0) {
cocReturn = (cashFlowAnnual / totalCashInvested) * 100;
}
var capRate = 0;
if (price > 0) {
capRate = (noiAnnual / price) * 100;
}
// Display Results
document.getElementById('res-mortgage').innerText = formatMoney(mortgagePayment);
document.getElementById('res-expenses').innerText = formatMoney(totalOpEx);
document.getElementById('res-noi').innerText = formatMoney(noiMo);
var cfEl = document.getElementById('res-cashflow');
cfEl.innerText = formatMoney(cashFlowMo);
if (cashFlowMo >= 0) {
cfEl.style.color = "#27ae60";
} else {
cfEl.style.color = "#c0392b";
}
document.getElementById('res-coc').innerText = cocReturn.toFixed(2) + "%";
document.getElementById('res-cap').innerText = capRate.toFixed(2) + "%";
document.getElementById('rc-results').style.display = 'block';
}
function formatMoney(num) {
return '$' + num.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
}
Mastering Real Estate Analysis with a Rental Property Calculator
Investing in real estate is one of the most reliable ways to build long-term wealth, but not every property is a good deal. To separate profitable investments from money pits, you need to crunch the numbers accurately. This Rental Property Cash Flow Calculator is designed to help investors evaluate the potential profitability of a residential rental property by analyzing income, expenses, financing, and projected returns.
Key Metrics Explained
Understanding the terminology is crucial for successful investing. Here are the definitions of the metrics calculated above:
NOI (Net Operating Income): This is your total revenue (rent) minus all operating expenses (taxes, insurance, maintenance, vacancy). It excludes mortgage payments. NOI is critical because it shows the property's raw profitability regardless of how it is financed.
Cash Flow: The net amount of cash moving in or out of your pocket every month. It is calculated as NOI minus Mortgage Payments. Positive cash flow is the primary goal for buy-and-hold investors.
Cash on Cash Return (CoC): A percentage return on the actual cash you invested (Down Payment + Closing Costs). If you invest $50,000 and get $5,000 in positive cash flow per year, your CoC is 10%. This allows you to compare real estate returns against stocks or bonds.
Cap Rate (Capitalization Rate): The rate of return on the property based on the income the property is expected to generate. It is calculated as Annual NOI / Purchase Price. It helps compare the value of different properties in the same market.
The 1% Rule and 50% Rule
When quickly screening properties before using a detailed calculator, investors often use "rules of thumb":
The 1% Rule: Suggests that the monthly rent should be at least 1% of the purchase price. For a $200,000 home, rent should be $2,000. While hard to find in expensive markets, this rule often indicates strong cash flow potential.
The 50% Rule: Estimates that 50% of your gross rental income will go toward operating expenses (excluding mortgage). If a property rents for $2,000, assume $1,000 will be used for taxes, insurance, and repairs. The remaining $1,000 must cover the mortgage for you to break even.
Common Expenses Investors Forget
Novice investors often overestimate profit by ignoring "hidden" costs. Our calculator includes fields for:
Vacancy Rate: Properties won't be rented 365 days a year. Budgeting 5-8% for vacancy ensures you have cash reserves when a tenant leaves.
Maintenance & Repairs: Even new homes break. Setting aside 10-15% of rent for repairs (Capital Expenditures or CapEx) prevents a broken HVAC system from destroying your annual profit.
Management Fees: Even if you self-manage now, budgeting 8-10% for a property manager ensures the deal still works if you decide to outsource later.
How to Improve Your Cash Flow
If the calculator shows negative cash flow, consider these strategies: negotiate a lower purchase price, increase the down payment to lower the mortgage, shop for lower insurance rates, or look for ways to add value to the property (like adding a bedroom or renovating the kitchen) to justify higher rent.