function calculateRentalCashFlow() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('rrc-price').value) || 0;
var downPaymentPercent = parseFloat(document.getElementById('rrc-down-payment').value) || 0;
var interestRate = parseFloat(document.getElementById('rrc-interest').value) || 0;
var termYears = parseFloat(document.getElementById('rrc-term').value) || 30;
var closingCosts = parseFloat(document.getElementById('rrc-closing-costs').value) || 0;
var monthlyRent = parseFloat(document.getElementById('rrc-rent').value) || 0;
var annualTax = parseFloat(document.getElementById('rrc-tax').value) || 0;
var annualInsurance = parseFloat(document.getElementById('rrc-insurance').value) || 0;
var monthlyHOA = parseFloat(document.getElementById('rrc-hoa').value) || 0;
var reservePercent = parseFloat(document.getElementById('rrc-maintenance').value) || 0;
// 2. Perform Calculations
// Loan Calculations
var downPaymentAmount = price * (downPaymentPercent / 100);
var loanAmount = price – downPaymentAmount;
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = termYears * 12;
// Mortgage P&I Formula
var monthlyMortgage = 0;
if (loanAmount > 0 && interestRate > 0) {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
} else if (loanAmount > 0 && interestRate === 0) {
monthlyMortgage = loanAmount / numberOfPayments;
}
// Expense Calculations
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
var monthlyReserves = monthlyRent * (reservePercent / 100);
var totalOperatingExpenses = monthlyTax + monthlyInsurance + monthlyHOA + monthlyReserves;
// Income Metrics
var noi = monthlyRent – totalOperatingExpenses; // Net Operating Income (Monthly)
var cashFlow = noi – monthlyMortgage;
var annualCashFlow = cashFlow * 12;
var annualNOI = noi * 12;
// Investment Metrics
var totalInitialInvestment = downPaymentAmount + closingCosts;
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
var cashOnCash = 0;
if (totalInitialInvestment > 0) {
cashOnCash = (annualCashFlow / totalInitialInvestment) * 100;
}
// 3. Update UI
// Helper for formatting currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
document.getElementById('res-noi').innerText = formatter.format(noi);
document.getElementById('res-mortgage').innerText = formatter.format(monthlyMortgage);
document.getElementById('res-expenses').innerText = formatter.format(totalOperatingExpenses + monthlyMortgage);
var cashFlowEl = document.getElementById('res-cashflow');
cashFlowEl.innerText = formatter.format(cashFlow);
if(cashFlow >= 0) {
cashFlowEl.className = "rrc-result-value rrc-highlight";
} else {
cashFlowEl.className = "rrc-result-value rrc-highlight-neg";
}
document.getElementById('res-coc').innerText = cashOnCash.toFixed(2) + "%";
document.getElementById('res-caprate').innerText = capRate.toFixed(2) + "%";
document.getElementById('res-initial-cash').innerText = formatter.format(totalInitialInvestment);
// Show results div
document.getElementById('rrc-results').style.display = 'block';
}
Understanding Your Rental Property ROI
Investing in real estate is a numbers game. Before purchasing a property, it is crucial to understand if the asset will generate positive cash flow and provide a sufficient return on investment (ROI). This Rental Property Cash Flow Calculator helps investors analyze potential deals by breaking down income, expenses, and key performance metrics.
Key Metrics Explained
1. Monthly Cash Flow
This is the profit you take home each month after all bills are paid. It is calculated by subtracting your total monthly expenses (mortgage, taxes, insurance, HOA, and maintenance reserves) from your rental income. Formula: Rent – (Operating Expenses + Debt Service) = Cash Flow
2. Cash-on-Cash Return
This percentage measures the annual return on the actual cash you invested (down payment + closing costs), rather than the total price of the property. It is often considered the most important metric for buy-and-hold investors. A Cash-on-Cash return of 8-12% is generally considered a solid investment in many markets.
3. Cap Rate (Capitalization Rate)
Cap rate measures the property's natural rate of return assuming it was bought with all cash (no mortgage). It helps you compare the profitability of one property against another, regardless of how they are financed. Higher cap rates generally imply higher risk or higher potential returns.
Example Calculation
Consider a property listed for $250,000. If you put 20% down ($50,000) and rent it out for $2,200/month:
Mortgage (P&I): Approx. $1,264 (at 6.5% interest)
Taxes & Insurance: Approx. $350/month
Reserves/HOA: Approx. $270/month
Total Cash Flow: Approx. $316/month
Using the calculator above allows you to tweak these variables to see how a change in interest rates or rental price affects your bottom line.