Analyze cash flow, Cap Rate, and Cash on Cash Return for real estate investments.
Purchase Information
Income & Expenses (Monthly)
Please enter valid numeric values for all fields.
Investment Analysis
Monthly Mortgage Payment (P&I):$0.00
Total Monthly Expenses:$0.00
Net Operating Income (NOI) / Mo:$0.00
Monthly Cash Flow:$0.00
Return on Investment
Cap Rate:0.00%
Cash on Cash Return:0.00%
Understanding Rental Property ROI
Investing in real estate is one of the most reliable ways to build wealth, but simply buying a property doesn't guarantee a profit. To succeed, investors must analyze the numbers meticulously. This Rental Property ROI Calculator helps you determine the viability of a potential investment by calculating key metrics like Cash Flow, Cap Rate, and Cash on Cash Return.
Key Metrics Explained
Cash Flow: This is the profit you take home each month after paying all operating expenses and debt service (mortgage).
NOI is a calculation used to analyze the profitability of income-generating real estate investments. NOI equals all revenue from the property, minus all reasonably necessary operating expenses. Notably, NOI represents the funds available before debt service (mortgage) is paid.
2. Cap Rate (Capitalization Rate)
The Cap Rate measures the natural rate of return on the investment assuming you bought it with cash. It is calculated by dividing the NOI by the property's purchase price. This metric is crucial for comparing the profitability of similar properties regardless of how they are financed.
3. Cash on Cash Return (CoC)
This is arguably the most important metric for leveraged investors. It measures the annual return on the actual cash you invested (Down Payment + Closing Costs). A Cash on Cash return of 8-12% is generally considered good in the current market, though this varies by location.
Why Maintenance and Vacancy Reserves Matter
Many novice investors fail because they only account for the mortgage, tax, and insurance. However, roofs leak, tenants move out, and appliances break. Our calculator allows you to set a percentage reserve (default is 10%) to account for vacancy periods and ongoing maintenance. Ignoring these costs will lead to an inflated and unrealistic view of your potential profits.
How to Use This Calculator
Purchase Price: The agreed-upon price of the property.
Down Payment: The cash you are paying upfront (typically 20-25% for investment loans).
Operating Expenses: Includes taxes, insurance, HOA fees, property management, and maintenance reserves.
Loan Terms: Your interest rate and amortization period (usually 30 years).
By inputting these figures, you can instantly see if a property will generate positive cash flow or if it will cost you money every month to hold.
function calculateRentalROI() {
// 1. Get Inputs
var price = parseFloat(document.getElementById('purchasePrice').value);
var closing = parseFloat(document.getElementById('closingCosts').value) || 0;
var down = parseFloat(document.getElementById('downPayment').value);
var rate = parseFloat(document.getElementById('interestRate').value);
var years = parseFloat(document.getElementById('loanTerm').value);
var rent = parseFloat(document.getElementById('monthlyRent').value);
var tax = parseFloat(document.getElementById('propertyTax').value) || 0;
var insurance = parseFloat(document.getElementById('insurance').value) || 0;
var hoa = parseFloat(document.getElementById('hoaFees').value) || 0;
var reservePercent = parseFloat(document.getElementById('maintenance').value) || 0;
// 2. Validation
var errorDiv = document.getElementById('rp-error');
if (isNaN(price) || isNaN(down) || isNaN(rate) || isNaN(years) || isNaN(rent)) {
errorDiv.style.display = 'block';
document.getElementById('rp-results').style.display = 'none';
return;
}
errorDiv.style.display = 'none';
// 3. Logic
// Mortgage Calculation (Principal & Interest)
var loanAmount = price – down;
var monthlyRate = (rate / 100) / 12;
var numberOfPayments = years * 12;
var mortgagePayment = 0;
if (rate === 0) {
mortgagePayment = loanAmount / numberOfPayments;
} else {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
// Expenses Calculation
var reserveCost = rent * (reservePercent / 100);
var totalMonthlyExpensesNoDebt = tax + insurance + hoa + reserveCost;
var totalMonthlyExpensesWithDebt = totalMonthlyExpensesNoDebt + mortgagePayment;
// Income Metrics
var noiMonthly = rent – totalMonthlyExpensesNoDebt;
var noiAnnual = noiMonthly * 12;
var cashFlowMonthly = rent – totalMonthlyExpensesWithDebt;
var cashFlowAnnual = cashFlowMonthly * 12;
// ROI Metrics
var totalCashInvested = down + closing;
var capRate = (noiAnnual / price) * 100;
var cocReturn = (cashFlowAnnual / totalCashInvested) * 100;
// 4. Output Display
document.getElementById('res-mortgage').innerText = '$' + mortgagePayment.toFixed(2);
document.getElementById('res-expenses').innerText = '$' + totalMonthlyExpensesWithDebt.toFixed(2);
document.getElementById('res-noi').innerText = '$' + noiMonthly.toFixed(2);
var cfElement = document.getElementById('res-cashflow');
cfElement.innerText = '$' + cashFlowMonthly.toFixed(2);
if(cashFlowMonthly >= 0) {
cfElement.style.color = '#38a169';
} else {
cfElement.style.color = '#e53e3e';
}
document.getElementById('res-caprate').innerText = capRate.toFixed(2) + '%';
var cocElement = document.getElementById('res-coc');
cocElement.innerText = cocReturn.toFixed(2) + '%';
if(cocReturn >= 0) {
cocElement.style.color = '#38a169';
} else {
cocElement.style.color = '#e53e3e';
}
// Show results
document.getElementById('rp-results').style.display = 'block';
}