Determine the profitability of your real estate investment instantly.
Investment Analysis
Total Upfront Cash Needed:$-
Monthly Mortgage Payment (P&I):$-
Total Monthly Expenses (Operating + Mortgage):$-
Adjusted Monthly Income (after vacancy):$-
Net Monthly Cash Flow:$-
Cash-on-Cash Return (Annual):-%
Understanding Your Rental Property Cash Flow
Investing in real estate is one of the most reliable ways to build wealth, but the difference between a successful investment and a financial burden often comes down to one metric: Cash Flow. Our Rental Property Cash Flow Calculator helps investors analyze the viability of a potential purchase by accounting for mortgage costs, operating expenses, and vacancy factors.
What is Positive Cash Flow?
Positive cash flow occurs when a property's gross rental income exceeds all of its expenses, including the mortgage, taxes, insurance, and maintenance costs. Achieving positive cash flow ensures that the property pays for itself while providing you with a monthly profit. This is essential for long-term sustainability and scalability in real estate portfolios.
Key Metrics Explained
Net Operating Income (NOI): This is your total revenue minus necessary operating expenses (excluding mortgage payments). It measures the raw profitability of the asset.
Cash-on-Cash Return: This metric calculates the cash income earned on the cash invested in a property. It is calculated by dividing the annual pre-tax cash flow by the total cash invested (down payment + closing costs). A "good" return depends on your local market, but many investors aim for 8-12%.
Vacancy Rate: No property is occupied 100% of the time. Factoring in a vacancy rate (typically 5-8%) ensures your calculations are realistic and you have a buffer for turnover periods.
How to Use This Calculator
To get the most accurate results, input your purchase price and financing details. Be sure to estimate your monthly expenses accurately. "Other Expenses" should include Property Taxes, Landlord Insurance, and HOA fees. Don't forget to set aside a budget for repairs (Repairs Reserve), as maintenance is inevitable.
Frequently Asked Questions
What is the 1% rule in real estate?
The 1% rule is a quick screening tool used by investors. It suggests that a property's monthly rent should be at least 1% of its purchase price. For example, a $200,000 home should rent for at least $2,000 per month. While not a hard rule, it helps identify properties with good cash flow potential.
Does this calculator include depreciation?
No, this calculator focuses on cash flow, which tracks the actual movement of money in and out of your pocket. Depreciation is a non-cash tax deduction that is handled when filing your annual tax returns, rather than affecting your monthly bank balance.
How much should I budget for maintenance?
A common rule of thumb is to budget 1% of the property value per year for maintenance, or 10-15% of the monthly rent. Older homes generally require a higher maintenance budget than newer construction.
function calculateROI() {
// 1. Get Input Values
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value);
var downPaymentPercent = parseFloat(document.getElementById('downPaymentPercent').value);
var interestRate = parseFloat(document.getElementById('interestRate').value);
var loanTermYears = parseFloat(document.getElementById('loanTerm').value);
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value);
var otherExpenses = parseFloat(document.getElementById('otherExpenses').value);
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value);
var repairsReserve = parseFloat(document.getElementById('repairsReserve').value);
// 2. Validation
if (isNaN(purchasePrice) || isNaN(downPaymentPercent) || isNaN(interestRate) ||
isNaN(loanTermYears) || isNaN(monthlyRent) || isNaN(otherExpenses)) {
alert("Please enter valid numbers in all fields.");
return;
}
// 3. Calculation Logic
// Loan Calculations
var downPaymentAmount = purchasePrice * (downPaymentPercent / 100);
var loanAmount = purchasePrice – downPaymentAmount;
var monthlyInterestRate = (interestRate / 100) / 12;
var numberOfPayments = loanTermYears * 12;
// Mortgage Payment Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
var monthlyMortgage = 0;
if (interestRate > 0) {
var x = Math.pow(1 + monthlyInterestRate, numberOfPayments);
monthlyMortgage = loanAmount * (monthlyInterestRate * x) / (x – 1);
} else {
monthlyMortgage = loanAmount / numberOfPayments;
}
// Income Adjustment
var vacancyCost = monthlyRent * (vacancyRate / 100);
var adjustedMonthlyIncome = monthlyRent – vacancyCost;
// Total Expenses
var totalMonthlyExpenses = monthlyMortgage + otherExpenses + repairsReserve;
// Cash Flow
var monthlyCashFlow = adjustedMonthlyIncome – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// Cash on Cash Return
// Total Cash Invested = Down Payment + Closing Costs (Estimated at 3% of price for simplicity in this logic)
var closingCosts = purchasePrice * 0.03;
var totalCashInvested = downPaymentAmount + closingCosts;
var cashOnCashReturn = (annualCashFlow / totalCashInvested) * 100;
// 4. Update UI
document.getElementById('results').style.display = 'block';
// Formatting function for currency
var fmt = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
document.getElementById('resUpfront').innerText = fmt.format(totalCashInvested) + " (incl. est. 3% closing costs)";
document.getElementById('resMortgage').innerText = fmt.format(monthlyMortgage);
document.getElementById('resTotalExpenses').innerText = fmt.format(totalMonthlyExpenses);
document.getElementById('resAdjIncome').innerText = fmt.format(adjustedMonthlyIncome);
document.getElementById('resCashFlow').innerText = fmt.format(monthlyCashFlow);
// Color coding cash flow
var cashFlowEl = document.getElementById('resCashFlow');
if (monthlyCashFlow >= 0) {
cashFlowEl.style.color = '#27ae60';
} else {
cashFlowEl.style.color = '#c0392b';
}
document.getElementById('resCoc').innerText = cashOnCashReturn.toFixed(2) + "%";
}