:root {
–primary-color: #2c3e50;
–accent-color: #27ae60;
–light-bg: #f8f9fa;
–border-color: #dee2e6;
–text-color: #333;
}
body {
font-family: -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif;
line-height: 1.6;
color: var(–text-color);
margin: 0;
padding: 20px;
max-width: 1200px;
margin: 0 auto;
}
.calculator-container {
background: #fff;
border: 1px solid var(–border-color);
border-radius: 8px;
box-shadow: 0 4px 6px rgba(0,0,0,0.05);
padding: 30px;
margin-bottom: 40px;
display: flex;
flex-wrap: wrap;
gap: 30px;
}
.input-section {
flex: 1;
min-width: 300px;
}
.results-section {
flex: 1;
min-width: 300px;
background: var(–light-bg);
padding: 20px;
border-radius: 8px;
border: 1px solid var(–border-color);
}
h2 {
color: var(–primary-color);
margin-top: 0;
border-bottom: 2px solid var(–accent-color);
padding-bottom: 10px;
display: inline-block;
}
.form-group {
margin-bottom: 15px;
}
label {
display: block;
margin-bottom: 5px;
font-weight: 600;
font-size: 0.95rem;
}
.input-wrapper {
position: relative;
}
.input-prefix, .input-suffix {
position: absolute;
top: 50%;
transform: translateY(-50%);
color: #666;
font-size: 0.9rem;
}
.input-prefix { left: 10px; }
.input-suffix { right: 10px; }
input[type="number"] {
width: 100%;
padding: 10px 10px 10px 25px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 1rem;
box-sizing: border-box;
}
input.percent-input {
padding-left: 10px;
padding-right: 25px;
}
.calc-btn {
background-color: var(–accent-color);
color: white;
border: none;
padding: 12px 24px;
font-size: 1rem;
font-weight: bold;
border-radius: 4px;
cursor: pointer;
width: 100%;
margin-top: 10px;
transition: background-color 0.2s;
}
.calc-btn:hover {
background-color: #219150;
}
.result-row {
display: flex;
justify-content: space-between;
align-items: center;
padding: 12px 0;
border-bottom: 1px solid #e0e0e0;
}
.result-row:last-child {
border-bottom: none;
}
.result-label {
font-weight: 600;
color: #555;
}
.result-value {
font-weight: 700;
font-size: 1.1rem;
color: var(–primary-color);
}
.highlight-result {
background-color: #e8f5e9;
padding: 15px;
border-radius: 6px;
margin-top: 10px;
}
.highlight-result .result-value {
color: var(–accent-color);
font-size: 1.4rem;
}
.article-content {
margin-top: 40px;
padding-top: 20px;
border-top: 1px solid var(–border-color);
}
.article-content h3 {
color: var(–primary-color);
margin-top: 25px;
}
.article-content p {
margin-bottom: 15px;
color: #444;
}
.article-content ul {
margin-bottom: 15px;
}
.article-content li {
margin-bottom: 8px;
}
@media (max-width: 768px) {
.calculator-container {
flex-direction: column;
}
}
Understanding Rental Property ROI and Cash Flow
Investing in rental real estate is a powerful way to build wealth, but simply buying a property doesn't guarantee profit. Successful investors rely on specific metrics to evaluate deals before they sign on the dotted line. This Rental Property Cash Flow & ROI Calculator helps you determine the viability of a potential investment by breaking down the numbers that matter most: Cash on Cash Return, Net Operating Income (NOI), and Cap Rate.
What is Cash on Cash Return?
Cash on Cash Return is widely considered the most important metric for rental property investors. It measures the annual pre-tax cash flow relative to the total amount of cash actually invested.
Unlike standard ROI, which might look at the total value of the asset, Cash on Cash Return focuses purely on the efficiency of your capital. It answers the question: "For every dollar I put into this deal, how much cash am I getting back this year?"
Formula: (Annual Pre-Tax Cash Flow / Total Cash Invested) × 100
Understanding Net Operating Income (NOI)
Net Operating Income (NOI) is a calculation used to analyze the profitability of income-generating real estate investments. NOI equals all revenue from the property, minus all necessary operating expenses.
Critically, NOI allows you to evaluate the profitability of a property independently of how it is financed. It excludes mortgage payments (debt service) and capital expenditures. It gives you a clear picture of the property's ability to generate revenue.
What is Cap Rate?
The Capitalization Rate (Cap Rate) helps investors compare the return of different properties on a level playing field. It represents the rate of return you would expect to generate on a real estate investment property if you paid all cash.
While Cash on Cash return varies based on your loan terms, the Cap Rate is intrinsic to the property and the market. A higher Cap Rate generally indicates higher risk and higher potential return, while a lower Cap Rate suggests a safer, but lower-yielding asset.
Key Inputs for Accurate Calculation
- Vacancy Rate: Properties are rarely occupied 100% of the time. It is prudent to budget 5-10% of gross rent for vacancy periods between tenants.
- Maintenance Reserves: Even newly renovated homes require upkeep. Setting aside 5-10% of monthly rent for repairs ensures you aren't caught off guard by a broken water heater.
- Closing Costs: Don't forget the upfront costs of buying! Title fees, inspections, and loan origination fees increase your "Total Cash Invested" and lower your first-year Cash on Cash return.
Use this calculator to adjust your offer price. If the ROI isn't meeting your investment goals (e.g., 8-12%), try lowering the Purchase Price input to see what offer you would need to make to achieve your target return.
function calculateROI() {
// Get Input Values
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value) || 0;
var closingCosts = parseFloat(document.getElementById('closingCosts').value) || 0;
var downPaymentPercent = parseFloat(document.getElementById('downPayment').value) || 0;
var interestRate = parseFloat(document.getElementById('interestRate').value) || 0;
var loanTermYears = parseFloat(document.getElementById('loanTerm').value) || 0;
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var annualTax = parseFloat(document.getElementById('annualTax').value) || 0;
var annualInsurance = parseFloat(document.getElementById('annualInsurance').value) || 0;
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value) || 0;
var maintenanceRate = parseFloat(document.getElementById('maintenanceRate').value) || 0;
// 1. Calculate Loan Details
var downPaymentAmount = purchasePrice * (downPaymentPercent / 100);
var loanAmount = purchasePrice – downPaymentAmount;
var totalCashInvested = downPaymentAmount + closingCosts;
// Monthly Mortgage Calculation (Principal & Interest)
// M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var monthlyMortgage = 0;
if (loanAmount > 0 && interestRate > 0 && loanTermYears > 0) {
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTermYears * 12;
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
} else if (loanAmount > 0 && interestRate === 0) {
monthlyMortgage = loanAmount / (loanTermYears * 12);
}
// 2. Calculate Monthly Expenses
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
var monthlyVacancy = monthlyRent * (vacancyRate / 100);
var monthlyMaintenance = monthlyRent * (maintenanceRate / 100);
var totalMonthlyOperatingExpenses = monthlyTax + monthlyInsurance + monthlyVacancy + monthlyMaintenance;
var totalMonthlyExpensesWithMortgage = totalMonthlyOperatingExpenses + monthlyMortgage;
// 3. Calculate Cash Flow
var monthlyCashFlow = monthlyRent – totalMonthlyExpensesWithMortgage;
var annualCashFlow = monthlyCashFlow * 12;
// 4. Calculate Net Operating Income (NOI) – Annual
// NOI = Gross Income – Operating Expenses (Excluding Mortgage)
var annualOperatingExpenses = totalMonthlyOperatingExpenses * 12;
var annualGrossIncome = monthlyRent * 12;
var noi = annualGrossIncome – annualOperatingExpenses;
// 5. Calculate Metrics
var capRate = 0;
if (purchasePrice > 0) {
capRate = (noi / purchasePrice) * 100;
}
var cashOnCash = 0;
if (totalCashInvested > 0) {
cashOnCash = (annualCashFlow / totalCashInvested) * 100;
}
// Update UI with Formatted Strings
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
document.getElementById('resCoc').innerText = cashOnCash.toFixed(2) + "%";
document.getElementById('resMonthlyCashFlow').innerText = formatter.format(monthlyCashFlow);
document.getElementById('resAnnualCashFlow').innerText = formatter.format(annualCashFlow);
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + "%";
document.getElementById('resNOI').innerText = formatter.format(noi);
document.getElementById('resCashInvested').innerText = formatter.format(totalCashInvested);
// Expense Breakdown
document.getElementById('resMortgage').innerText = formatter.format(monthlyMortgage);
document.getElementById('resVacancy').innerText = formatter.format(monthlyVacancy);
document.getElementById('resMaintenance').innerText = formatter.format(monthlyMaintenance);
document.getElementById('resTaxIns').innerText = formatter.format(monthlyTax + monthlyInsurance);
// Color logic for Cash Flow
if(monthlyCashFlow >= 0) {
document.getElementById('resMonthlyCashFlow').style.color = "#27ae60";
} else {
document.getElementById('resMonthlyCashFlow').style.color = "#c0392b";
}
}
// Run calculation initially to show default state
calculateROI();