Rental Property Cash Flow Calculator
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Rental Property Cash Flow Calculator
Investment Analysis
Monthly Gross Income:
$0.00
Monthly Mortgage P&I:
$0.00
Monthly Operating Expenses:
$0.00
Net Operating Income (Monthly):
$0.00
Est. Monthly Cash Flow
$0.00
Cash on Cash Return:
0.00%
Cap Rate:
0.00%
Total Cash Needed:
$0.00
Understanding Rental Property Returns
Investing in real estate is a powerful way to build wealth, but simply buying a property and renting it out doesn't guarantee a profit. To succeed, investors must analyze the numbers rigorously. This Rental Property Cash Flow Calculator is designed to help you determine the viability of a potential investment by calculating key metrics like Cash Flow, Cash-on-Cash Return, and Cap Rate.
What is Monthly Cash Flow?
Cash Flow is the net amount of money moving in and out of your rental business each month. It is calculated by taking your total monthly income (rent + other income) and subtracting all expenses, including the mortgage payment. Positive cash flow means the property pays for itself and puts money in your pocket, while negative cash flow implies you are losing money every month to hold the asset.
Key Metrics Explained
- NOI (Net Operating Income): This is your annual income minus operating expenses (taxes, insurance, maintenance, vacancy, management) excluding mortgage payments. It measures the raw profitability of the property itself.
- Cap Rate (Capitalization Rate): Calculated as (NOI / Purchase Price), this percentage helps you compare the return of the property against other investments, regardless of financing. A higher cap rate generally indicates higher risk or higher potential return.
- Cash-on-Cash Return: This is arguably the most important metric for investors using leverage. It measures your annual cash flow divided by the total cash you invested (Down Payment + Closing Costs). It tells you how hard your actual cash is working for you.
Estimating Expenses Accurately
One of the biggest mistakes new investors make is underestimating expenses. Always account for:
- Vacancy: Properties will not be occupied 365 days a year. A standard rule of thumb is 5-8%.
- Maintenance: Roofs leak and toilets break. Setting aside 5-10% of rent for repairs ensures you aren't caught off guard.
- Management Fees: Even if you plan to self-manage, include a fee (usually 8-10%) in your calculation. This ensures the deal still works if you decide to hire a property manager later.
How to Use This Calculator
Enter your purchase details, financing terms, projected rental income, and anticipated expenses. The calculator will automatically derive your monthly mortgage payment based on the loan amount and interest rate. The final output provides a clear snapshot of whether the property generates positive cash flow and what return on investment (ROI) you can expect.
function calculateRentalReturns() {
// 1. Get Inputs
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value) || 0;
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var interestRate = parseFloat(document.getElementById('interestRate').value) || 0;
var loanTerm = parseFloat(document.getElementById('loanTerm').value) || 0;
var closingCosts = parseFloat(document.getElementById('closingCosts').value) || 0;
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var otherIncome = parseFloat(document.getElementById('otherIncome').value) || 0;
var propertyTaxAnnual = parseFloat(document.getElementById('propertyTax').value) || 0;
var insuranceAnnual = parseFloat(document.getElementById('insurance').value) || 0;
var hoaFee = parseFloat(document.getElementById('hoaFee').value) || 0;
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value) || 0;
var maintenanceRate = parseFloat(document.getElementById('maintenanceRate').value) || 0;
var managementFee = parseFloat(document.getElementById('managementFee').value) || 0;
// 2. Perform Calculations
// Income
var grossMonthlyIncome = monthlyRent + otherIncome;
var grossAnnualIncome = grossMonthlyIncome * 12;
// Mortgage Calculation
var loanAmount = purchasePrice – downPayment;
var monthlyMortgage = 0;
if (loanAmount > 0 && interestRate > 0 && loanTerm > 0) {
var monthlyRate = (interestRate / 100) / 12;
var numPayments = loanTerm * 12;
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
} else if (loanAmount > 0 && interestRate === 0) {
monthlyMortgage = loanAmount / (loanTerm * 12);
}
// Variable Expenses based on Percentages
var vacancyCost = grossMonthlyIncome * (vacancyRate / 100);
var maintenanceCost = grossMonthlyIncome * (maintenanceRate / 100);
var managementCost = grossMonthlyIncome * (managementFee / 100);
// Total Monthly Operating Expenses (Excluding Mortgage)
var fixedMonthlyExpenses = (propertyTaxAnnual / 12) + (insuranceAnnual / 12) + hoaFee;
var totalMonthlyExpenses = fixedMonthlyExpenses + vacancyCost + maintenanceCost + managementCost;
// Net Operating Income (NOI)
var monthlyNOI = grossMonthlyIncome – totalMonthlyExpenses;
var annualNOI = monthlyNOI * 12;
// Cash Flow
var monthlyCashFlow = monthlyNOI – monthlyMortgage;
var annualCashFlow = monthlyCashFlow * 12;
// Investment Returns
var totalCashInvested = downPayment + closingCosts;
var capRate = 0;
if (purchasePrice > 0) {
capRate = (annualNOI / purchasePrice) * 100;
}
var cocReturn = 0;
if (totalCashInvested > 0) {
cocReturn = (annualCashFlow / totalCashInvested) * 100;
}
// 3. Format currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
// 4. Update UI
document.getElementById('resGrossIncome').innerHTML = formatter.format(grossMonthlyIncome);
document.getElementById('resMortgage').innerHTML = formatter.format(monthlyMortgage);
document.getElementById('resExpenses').innerHTML = formatter.format(totalMonthlyExpenses);
document.getElementById('resNOI').innerHTML = formatter.format(monthlyNOI);
var cashFlowEl = document.getElementById('resCashFlow');
cashFlowEl.innerHTML = formatter.format(monthlyCashFlow);
if(monthlyCashFlow >= 0) {
cashFlowEl.style.color = "#27ae60";
} else {
cashFlowEl.style.color = "#c0392b";
}
document.getElementById('resCoC').innerHTML = cocReturn.toFixed(2) + "%";
document.getElementById('resCapRate').innerHTML = capRate.toFixed(2) + "%";
document.getElementById('resCashNeeded').innerHTML = formatter.format(totalCashInvested);
}
// Run once on load to populate defaults
window.onload = function() {
calculateRentalReturns();
};