function calculateRental() {
// Inputs
var price = parseFloat(document.getElementById('purchasePrice').value) || 0;
var downPercent = parseFloat(document.getElementById('downPaymentPercent').value) || 0;
var interestRate = parseFloat(document.getElementById('interestRate').value) || 0;
var years = parseFloat(document.getElementById('loanTerm').value) || 0;
var rent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var taxYear = parseFloat(document.getElementById('propertyTax').value) || 0;
var insYear = parseFloat(document.getElementById('insurance').value) || 0;
var hoa = parseFloat(document.getElementById('hoa').value) || 0;
var maintPercent = parseFloat(document.getElementById('maintenance').value) || 0;
// Loan Calculations
var downPayment = price * (downPercent / 100);
var loanAmount = price – downPayment;
var monthlyRate = (interestRate / 100) / 12;
var numPayments = years * 12;
var mortgagePayment = 0;
if (interestRate > 0) {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
} else {
mortgagePayment = loanAmount / numPayments;
}
// Monthly Expenses
var taxMonth = taxYear / 12;
var insMonth = insYear / 12;
var maintCost = rent * (maintPercent / 100);
var totalExpenses = mortgagePayment + taxMonth + insMonth + hoa + maintCost;
// Cash Flow
var cashFlow = rent – totalExpenses;
var annualCashFlow = cashFlow * 12;
// Investment Returns
// Estimating closing costs at 3% of purchase price roughly for the "Cash to Close" calculation
var closingCosts = price * 0.03;
var totalCashInvested = downPayment + closingCosts;
var cocRoi = (annualCashFlow / totalCashInvested) * 100;
// Cap Rate = (NOI / Price) * 100
// NOI = (Rent – (Expenses excluding Mortgage)) * 12
var noiMonth = rent – (taxMonth + insMonth + hoa + maintCost);
var noiAnnual = noiMonth * 12;
var capRate = (noiAnnual / price) * 100;
// Formatter
var fmtMoney = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
var fmtPercent = new Intl.NumberFormat('en-US', { style: 'percent', minimumFractionDigits: 2, maximumFractionDigits: 2 });
// Update DOM
document.getElementById('resGrossRent').innerText = fmtMoney.format(rent);
document.getElementById('resMortgage').innerText = "-" + fmtMoney.format(mortgagePayment);
document.getElementById('resTax').innerText = "-" + fmtMoney.format(taxMonth);
document.getElementById('resIns').innerText = "-" + fmtMoney.format(insMonth);
document.getElementById('resHoa').innerText = "-" + fmtMoney.format(hoa);
document.getElementById('resMaint').innerText = "-" + fmtMoney.format(maintCost);
var cfEl = document.getElementById('resCashFlow');
cfEl.innerText = fmtMoney.format(cashFlow);
cfEl.className = cashFlow >= 0 ? "highlight" : "negative";
document.getElementById('resAnnualFlow').innerText = fmtMoney.format(annualCashFlow);
document.getElementById('resCashToClose').innerText = fmtMoney.format(totalCashInvested);
var cocEl = document.getElementById('resCoc');
cocEl.innerText = fmtPercent.format(cocRoi / 100);
cocEl.className = cocRoi >= 0 ? "highlight" : "negative";
document.getElementById('resCap').innerText = fmtPercent.format(capRate / 100);
}
// Initial run
calculateRental();
How to Analyze a Rental Property Investment
Investing in real estate is one of the most reliable ways to build wealth, but it requires careful financial analysis. A Rental Property Cash Flow Calculator helps investors determine if a property will generate a profit (positive cash flow) or cost money to hold (negative cash flow).
Key Metrics Explained
When using this calculator, it is essential to understand the output metrics:
Cash Flow: This is the profit you take home every month after paying all operating expenses and the mortgage. Ideally, you want this to be positive. A general rule of thumb for many investors is to aim for at least $100-$200 per door in net positive cash flow.
Cash on Cash ROI (CoC): This measures the return on the actual cash you invested (Down Payment + Closing Costs). Unlike a stock market return which calculates based on total value, CoC ROI shows how hard your specific dollars are working. A CoC ROI of 8-12% is often considered a solid target for rental properties.
Cap Rate (Capitalization Rate): This metric evaluates the profitability of the property independent of financing. It is calculated by dividing the Net Operating Income (NOI) by the property asset value. It helps compare properties as if you were buying them with 100% cash.
Understanding Expenses
Many new investors make the mistake of only subtracting the mortgage from the rent to calculate profit. However, real world real estate involves several "hidden" costs:
Vacancy Rate: Properties are rarely occupied 100% of the time. Setting aside 5-10% of monthly rent accounts for turnover periods between tenants.
Maintenance Reserves: Roofs leak, toilets break, and HVAC systems fail. Allocating 5-15% of rent for repairs ensures you have the cash when these issues arise.
Capital Expenditures (CapEx): These are big-ticket items like replacing a roof or water heater. While they don't happen monthly, they should be budgeted for monthly.
The 1% Rule
A quick screening tool used by investors is the "1% Rule." This rule states that the monthly rent should be at least 1% of the purchase price. For example, a $200,000 house should rent for $2,000/month. While it is becoming harder to find properties that meet this rule in high-cost areas, it remains a useful benchmark for initial cash flow viability.
Conclusion
Using a rental property calculator removes emotion from the buying process. By inputting accurate estimates for insurance, taxes, and maintenance, you can ensure your investment will help you achieve financial freedom rather than becoming a financial burden.