Rental Property ROI & Cash Flow Calculator
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Financial Analysis
Monthly Mortgage P&I:
$0.00
Total Monthly Expenses:
$0.00
Monthly Net Operating Income (NOI):
$0.00
Monthly Cash Flow:
$0.00
Annual Cash Flow:
$0.00
Cash on Cash Return
0.00%
Cap Rate (Capitalization Rate):
0.00%
Total Initial Investment:
$0.00
Understanding Rental Property ROI
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 meticulously. This Rental Property ROI Calculator helps you evaluate the profitability of a potential investment by breaking down the most critical metrics.
Key Metrics Explained
Cash on Cash Return (CoC)
This is arguably the most important metric for rental investors. It measures the annual return on the actual cash you invested (down payment + closing costs + rehab), rather than the total price of the property.
Formula: Annual Cash Flow / Total Cash Invested
Capitalization Rate (Cap Rate)
The Cap Rate measures the property's natural rate of return assuming you paid all cash. It helps compare properties regardless of financing.
Formula: Net Operating Income (NOI) / Purchase Price
Net Operating Income (NOI)
This is the total income the property generates minus all operating expenses (taxes, insurance, maintenance, vacancy) but before mortgage payments.
Example Scenario
Let's say you buy a property for $250,000. You put 20% down ($50,000) and pay $5,000 in closing costs. Your total cash invested is $55,000.
- Rental Income: $2,200/month ($26,400/year)
- Operating Expenses: $6,000/year
- Mortgage Payment: ~$15,178/year (Principal & Interest)
Your NOI is $20,400 ($26,400 – $6,000). Your Cash Flow is $5,222 ($20,400 – $15,178). Your Cash on Cash Return would be 9.49% ($5,222 / $55,000), which represents a solid performing asset in many markets.
Why Calculate Cash Flow?
While appreciation (the property increasing in value) is a great bonus, successful investors prioritize positive cash flow. Positive cash flow ensures the property pays for itself and provides you with passive income every month, reducing the risk of holding the asset during market downturns.
function calculateRentalROI() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('purchasePrice').value) || 0;
var down = parseFloat(document.getElementById('downPayment').value) || 0;
var closing = parseFloat(document.getElementById('closingCosts').value) || 0;
var rate = parseFloat(document.getElementById('interestRate').value) || 0;
var term = parseFloat(document.getElementById('loanTerm').value) || 0;
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var annualExp = parseFloat(document.getElementById('annualExpenses').value) || 0;
// 2. Calculate Mortgage (Principal & Interest)
var loanAmount = price – down;
var monthlyRate = (rate / 100) / 12;
var totalMonths = term * 12;
var monthlyMortgage = 0;
if (loanAmount > 0 && monthlyRate > 0) {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalMonths)) / (Math.pow(1 + monthlyRate, totalMonths) – 1);
} else if (loanAmount > 0 && rate === 0) {
monthlyMortgage = loanAmount / totalMonths;
}
// 3. Calculate Expenses & NOI
var monthlyExp = annualExp / 12;
var totalMonthlyCost = monthlyMortgage + monthlyExp;
var annualNOI = (monthlyRent * 12) – annualExp;
var monthlyNOI = annualNOI / 12;
// 4. Calculate Cash Flow
var monthlyCashFlow = monthlyRent – totalMonthlyCost;
var annualCashFlow = monthlyCashFlow * 12;
// 5. Calculate Returns
var totalInvested = down + closing;
var cashOnCash = 0;
var capRate = 0;
if (totalInvested > 0) {
cashOnCash = (annualCashFlow / totalInvested) * 100;
}
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
// 6. Format and Display Results
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
document.getElementById('resMortgage').innerText = formatter.format(monthlyMortgage);
document.getElementById('resTotalExp').innerText = formatter.format(totalMonthlyCost);
document.getElementById('resMonthlyNOI').innerText = formatter.format(monthlyNOI);
var cfElement = document.getElementById('resCashFlow');
cfElement.innerText = formatter.format(monthlyCashFlow);
if(monthlyCashFlow >= 0) {
cfElement.style.color = "#27ae60"; // Green
} else {
cfElement.style.color = "#e74c3c"; // Red
}
document.getElementById('resAnnualCashFlow').innerText = formatter.format(annualCashFlow);
document.getElementById('resTotalInvested').innerText = formatter.format(totalInvested);
document.getElementById('resCashOnCash').innerText = cashOnCash.toFixed(2) + "%";
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + "%";
}
// Run initial calculation on load
window.onload = function() {
calculateRentalROI();
};
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"@type": "Question",
"name": "What is a good Cash on Cash return?",
"acceptedAnswer": {
"@type": "Answer",
"text": "A 'good' Cash on Cash return varies by market and investor goals, but generally, investors aim for 8-12%. In highly competitive markets, 5-7% might be acceptable if appreciation potential is high."
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}, {
"@type": "Question",
"name": "How do I calculate Cap Rate?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Cap Rate is calculated by dividing the Net Operating Income (NOI) by the property's purchase price. For example, if a property generates $10,000 in NOI and costs $100,000, the Cap Rate is 10%."
}
}, {
"@type": "Question",
"name": "Does this calculator include tax benefits?",
"acceptedAnswer": {
"@type": "Answer",
"text": "This calculator focuses on pre-tax cash flow. Real estate offers significant tax benefits like depreciation, but these vary greatly by individual tax situations and should be calculated with a CPA."
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