Analyze the potential profitability of your real estate investment.
Purchase & Loan Details
Income & Expenses
Monthly Cash Flow:
Cash on Cash Return (ROI):
Cap Rate:
Monthly Mortgage Payment (P&I):
Total Monthly Expenses:
Net Operating Income (Monthly):
Understanding Rental Property Cash Flow
Investing in real estate is a powerful way to build wealth, but the success of any rental property hinges on the mathematics behind the deal. The Rental Property Cash Flow Calculator helps investors move beyond rough estimates and evaluate the true profitability of a potential purchase.
Why Cash Flow is King
Cash flow represents the net amount of cash moving in and out of a business. In real estate terms, positive cash flow means your rental income exceeds all expenses (mortgage, taxes, insurance, repairs, vacancy). This surplus income is your profit. Negative cash flow implies you are losing money every month to hold the property, banking solely on appreciation—a risky strategy.
Key Metrics Explained
Cash on Cash Return (CoC): This is arguably the most important metric for investors. It measures the annual return on the actual cash you invested (Down Payment + Closing Costs). A CoC of 8-12% is often considered a solid benchmark in many markets.
Cap Rate (Capitalization Rate): This metric evaluates the profitability of a property independent of its financing. It is calculated by dividing the Net Operating Income (NOI) by the current market value of the asset. It helps compare properties as if they were bought with all cash.
Net Operating Income (NOI): This is your total income minus operating expenses. Crucially, NOI excludes mortgage payments. It reflects the property's ability to generate revenue from operations alone.
Common Expenses Often Overlooked
Many novice investors calculate profitability by simply subtracting the mortgage from the rent. This calculator accounts for the "hidden" costs that eat into profits:
Vacancy Rate: Properties are rarely occupied 100% of the time. Budgeting 5-10% ensures you have a buffer for turnover periods.
Maintenance & Repairs: Roofs leak and toilets break. Allocating a percentage of monthly rent (usually 5-10%) to a repair fund is essential for long-term accuracy.
Property Management: Even if you plan to self-manage, you should account for your time or the future possibility of hiring a manager (typically 8-10% of rent).
How to Use This Calculator
Start by inputting the purchase price and your financing details. Be honest with your expense estimates. While you can control the rent you charge, you cannot control market vacancy rates or tax hikes. Use conservative numbers to ensure your investment can withstand market fluctuations.
function calculateRental() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('rpcPurchasePrice').value);
var downPercent = parseFloat(document.getElementById('rpcDownPayment').value);
var rate = parseFloat(document.getElementById('rpcInterestRate').value);
var term = parseFloat(document.getElementById('rpcLoanTerm').value);
var rent = parseFloat(document.getElementById('rpcMonthlyRent').value);
var vacancyRate = parseFloat(document.getElementById('rpcVacancyRate').value);
var tax = parseFloat(document.getElementById('rpcPropTax').value);
var insurance = parseFloat(document.getElementById('rpcInsurance').value);
var maintPercent = parseFloat(document.getElementById('rpcMaintenance').value);
var mgmtPercent = parseFloat(document.getElementById('rpcManagement').value);
var hoa = parseFloat(document.getElementById('rpcHoa').value);
var closingCosts = parseFloat(document.getElementById('rpcClosingCosts').value);
// 2. Validate Inputs
if (isNaN(price) || isNaN(rent) || isNaN(term)) {
alert("Please enter valid numbers for Price, Rent, and Loan Term.");
return;
}
// 3. Loan Calculations
var downPaymentAmount = price * (downPercent / 100);
var loanAmount = price – downPaymentAmount;
var totalCashInvested = downPaymentAmount + closingCosts;
// Monthly Mortgage (P&I) Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var monthlyRate = (rate / 100) / 12;
var numberOfPayments = term * 12;
var monthlyMortgage = 0;
if (rate > 0) {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
} else {
monthlyMortgage = loanAmount / numberOfPayments;
}
// 4. Operating Expenses
var vacancyCost = rent * (vacancyRate / 100);
var maintCost = rent * (maintPercent / 100);
var mgmtCost = rent * (mgmtPercent / 100);
var monthlyTax = tax / 12;
var monthlyInsurance = insurance / 12;
var totalOperatingExpenses = monthlyTax + monthlyInsurance + vacancyCost + maintCost + mgmtCost + hoa;
var totalMonthlyExpensesWithMortgage = totalOperatingExpenses + monthlyMortgage;
// 5. Income Metrics
// Gross Operating Income usually accounts for vacancy, so we subtract vacancy from rent first for effective gross
var effectiveGrossIncome = rent – vacancyCost;
// NOI = Effective Gross Income – Operating Expenses (Excluding Mortgage)
// Operating expenses here are Tax, Ins, Maint, Mgmt, HOA. (Vacancy already handled in Effective Gross)
var monthlyNOI = effectiveGrossIncome – (monthlyTax + monthlyInsurance + maintCost + mgmtCost + hoa);
// Cash Flow = NOI – Mortgage
var monthlyCashFlow = monthlyNOI – monthlyMortgage;
var annualCashFlow = monthlyCashFlow * 12;
var annualNOI = monthlyNOI * 12;
// 6. Return Metrics
var cashOnCash = 0;
if (totalCashInvested > 0) {
cashOnCash = (annualCashFlow / totalCashInvested) * 100;
}
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
// 7. Update DOM
var resBox = document.getElementById('rpcResultBox');
resBox.style.display = 'block';
var cfElement = document.getElementById('resCashFlow');
cfElement.innerText = "$" + monthlyCashFlow.toFixed(2);
// Color coding for cash flow
if(monthlyCashFlow >= 0) {
cfElement.className = "rpc-result-value rpc-highlight";
} else {
cfElement.className = "rpc-result-value rpc-highlight-neg";
}
document.getElementById('resCoc').innerText = cashOnCash.toFixed(2) + "%";
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + "%";
document.getElementById('resMortgage').innerText = "$" + monthlyMortgage.toFixed(2);
document.getElementById('resExpenses').innerText = "$" + totalMonthlyExpensesWithMortgage.toFixed(2);
document.getElementById('resNoi').innerText = "$" + monthlyNOI.toFixed(2);
}