function calculateRental() {
// 1. Get Inputs
var price = parseFloat(document.getElementById('purchasePrice').value);
var downPercent = parseFloat(document.getElementById('downPayment').value);
var rate = parseFloat(document.getElementById('interestRate').value);
var term = parseFloat(document.getElementById('loanTerm').value);
var closing = parseFloat(document.getElementById('closingCosts').value);
var rent = parseFloat(document.getElementById('monthlyRent').value);
var otherInc = parseFloat(document.getElementById('otherIncome').value);
var taxYear = parseFloat(document.getElementById('propertyTax').value);
var insYear = parseFloat(document.getElementById('insurance').value);
var hoa = parseFloat(document.getElementById('hoa').value);
var maintPercent = parseFloat(document.getElementById('maintenance').value);
var vacancyPercent = parseFloat(document.getElementById('vacancy').value);
var capexPercent = parseFloat(document.getElementById('capex').value);
// Validation
if(isNaN(price) || isNaN(rent)) {
alert("Please enter valid numbers for Price and Rent.");
return;
}
// 2. Calculations
// Loan Calculation
var downAmount = price * (downPercent / 100);
var loanAmount = price – downAmount;
var monthlyRate = (rate / 100) / 12;
var numPayments = term * 12;
var monthlyMortgage = 0;
if (rate > 0) {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
} else {
monthlyMortgage = loanAmount / numPayments;
}
// Operating Income
var grossIncome = rent + otherInc;
var vacancyCost = grossIncome * (vacancyPercent / 100);
var effectiveGrossIncome = grossIncome – vacancyCost;
// Operating Expenses
var taxMonth = taxYear / 12;
var insMonth = insYear / 12;
var maintCost = grossIncome * (maintPercent / 100);
var capexCost = grossIncome * (capexPercent / 100); // Capital Expenditures
var operatingExpenses = taxMonth + insMonth + hoa + maintCost + capexCost; // Does not include mortgage
var totalMonthlyExpenses = operatingExpenses + monthlyMortgage;
// Results
var noi = effectiveGrossIncome – operatingExpenses; // Net Operating Income
var monthlyCashFlow = effectiveGrossIncome – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// Cash on Cash Return
var totalInvested = downAmount + closing;
var cocReturn = 0;
if(totalInvested > 0) {
cocReturn = (annualCashFlow / totalInvested) * 100;
}
// 3. Update DOM
var fmt = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
document.getElementById('resMortgage').innerHTML = fmt.format(monthlyMortgage);
document.getElementById('resTotalExpenses').innerHTML = fmt.format(totalMonthlyExpenses);
document.getElementById('resNOI').innerHTML = fmt.format(noi);
var cfEl = document.getElementById('resCashFlow');
cfEl.innerHTML = fmt.format(monthlyCashFlow);
if(monthlyCashFlow >= 0) {
cfEl.style.color = "#27ae60";
} else {
cfEl.style.color = "#c0392b";
}
document.getElementById('resAnnualCashFlow').innerHTML = fmt.format(annualCashFlow);
document.getElementById('resCoC').innerHTML = cocReturn.toFixed(2) + "%";
document.getElementById('resultsArea').style.display = 'block';
}
Understanding Rental Property Cash Flow
Calculating cash flow is the most critical step in evaluating a real estate investment. Positive cash flow ensures that the property pays for itself while you build equity, whereas negative cash flow can quickly drain your reserves. This Rental Property Cash Flow Calculator is designed to help investors accurately predict the profitability of a potential purchase.
How to Calculate Cash Flow from Real Estate
Cash flow is essentially the money left over after all expenses are paid. The formula is straightforward, but it requires accurate inputs to be effective:
Gross Income: The total rent collected plus any additional income (laundry, parking, pet fees).
Operating Expenses: Costs to run the property, including taxes, insurance, HOA fees, maintenance, and vacancy allowances.
Debt Service: Your monthly mortgage payment (Principal and Interest).
NOI is the profitability of the property before the mortgage is paid. It is calculated by subtracting operating expenses from the effective gross income. This metric is crucial because it allows you to compare the profitability of different properties regardless of financing structures.
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). For example, if you invest $50,000 to buy a property and it generates $5,000 in annual cash flow, your Cash on Cash return is 10%. This allows you to compare real estate returns against other investment vehicles like stocks or bonds.
Estimating "Hidden" Expenses
Many new investors fail because they only calculate Mortgage, Taxes, and Insurance (PITI). To get a true cash flow number, you must account for:
Vacancy Rate: Properties will not be occupied 100% of the time. Using a 5% to 8% vacancy rate helps buffer for turnover periods.
Maintenance & CapEx: Things break. Setting aside 5% to 10% of monthly rent for repairs ensures you have funds when a water heater breaks or a roof needs replacing.
Property Management: Even if you self-manage now, calculating a 10% management fee ensures the deal still works if you decide to hire a manager later.
What is a "Good" Cash Flow?
While this varies by market and strategy, many investors aim for a minimum of $100 to $200 per door, per month in pure cash flow. Additionally, a Cash on Cash return of 8% to 12% is often considered a solid benchmark for residential rental properties.