Rental Property Cash Flow Calculator
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function calculateCashFlow() {
// Clear error
var errorDisplay = document.getElementById('errorDisplay');
errorDisplay.style.display = 'none';
// Get Inputs
var propPrice = parseFloat(document.getElementById('propPrice').value);
var downPaymentPercent = parseFloat(document.getElementById('downPayment').value);
var interestRate = parseFloat(document.getElementById('interestRate').value);
var loanTerm = parseFloat(document.getElementById('loanTerm').value);
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value);
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value);
var yearlyTax = parseFloat(document.getElementById('yearlyTax').value);
var yearlyInsurance = parseFloat(document.getElementById('yearlyInsurance').value);
var maintenance = parseFloat(document.getElementById('maintenance').value);
var mgmtFee = parseFloat(document.getElementById('mgmtFee').value);
// Validation
if (isNaN(propPrice) || isNaN(downPaymentPercent) || isNaN(interestRate) ||
isNaN(loanTerm) || isNaN(monthlyRent) || isNaN(vacancyRate) ||
isNaN(yearlyTax) || isNaN(yearlyInsurance) || isNaN(maintenance) || isNaN(mgmtFee)) {
errorDisplay.style.display = 'block';
return;
}
// Calculations – Loan
var downPaymentAmount = propPrice * (downPaymentPercent / 100);
var loanAmount = propPrice – downPaymentAmount;
var monthlyRate = (interestRate / 100) / 12;
var totalMonths = loanTerm * 12;
var monthlyMortgage = 0;
if (monthlyRate > 0) {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalMonths)) / (Math.pow(1 + monthlyRate, totalMonths) – 1);
} else {
monthlyMortgage = loanAmount / totalMonths;
}
// Calculations – Expenses
var vacancyCost = monthlyRent * (vacancyRate / 100);
var maintenanceCost = monthlyRent * (maintenance / 100);
var mgmtCost = monthlyRent * (mgmtFee / 100);
var monthlyTax = yearlyTax / 12;
var monthlyInsurance = yearlyInsurance / 12;
var totalOperatingExpenses = monthlyTax + monthlyInsurance + vacancyCost + maintenanceCost + mgmtCost;
var totalMonthlyCost = totalOperatingExpenses + monthlyMortgage;
// Metrics
var monthlyCashFlow = monthlyRent – totalMonthlyCost;
var yearlyCashFlow = monthlyCashFlow * 12;
// NOI (Net Operating Income) = Gross Income – Operating Expenses (excluding debt service)
// Gross Income adjusted for vacancy
var effectiveGrossIncome = (monthlyRent – vacancyCost) * 12;
var yearlyOperatingExpenses = (monthlyTax + monthlyInsurance + maintenanceCost + mgmtCost) * 12;
var annualNOI = effectiveGrossIncome – yearlyOperatingExpenses;
// Cap Rate = (NOI / Property Value) * 100
var capRate = (annualNOI / propPrice) * 100;
// Cash on Cash Return = (Annual Cash Flow / Total Cash Invested) * 100
// Cash Invested = Down Payment (simplified, ignoring closing costs for this tool)
var cashOnCash = 0;
if (downPaymentAmount > 0) {
cashOnCash = (yearlyCashFlow / downPaymentAmount) * 100;
}
// Display Results
document.getElementById('resCashFlow').innerHTML = formatCurrency(monthlyCashFlow);
document.getElementById('resNOI').innerHTML = formatCurrency(annualNOI);
document.getElementById('resCapRate').innerHTML = capRate.toFixed(2) + '%';
document.getElementById('resCoC').innerHTML = cashOnCash.toFixed(2) + '%';
document.getElementById('resMortgage').innerHTML = formatCurrency(monthlyMortgage);
document.getElementById('resExpenses').innerHTML = formatCurrency(totalOperatingExpenses);
// Show section
document.getElementById('resultsSection').style.display = 'block';
}
function formatCurrency(num) {
return '$' + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}
Understanding Your Rental Property Cash Flow
Calculating cash flow is the fundamental step in evaluating any rental property investment. Positive cash flow ensures that the property pays for itself while generating income for you, whereas negative cash flow implies that you will need to inject capital monthly to keep the investment afloat.
What is Cash Flow?
Cash flow is the net amount of money moving in and out of a business or investment. In real estate, it is calculated as:
Cash Flow = Total Income – Total Expenses
Total income primarily consists of rent, while total expenses include mortgage payments, property taxes, insurance, maintenance, vacancy reserves, and property management fees. This calculator breaks down these costs individually to provide a precise monthly estimate.
Key Metrics Explained
Aside from raw monthly cash flow, successful investors look at several other KPIs provided by this calculator:
- Net Operating Income (NOI): This represents the profitability of the property before factoring in financing (mortgage) and taxes. It is a pure measure of the property's potential. Formula: (Gross Operating Income – Operating Expenses).
- Cap Rate (Capitalization Rate): This metric helps compare the return on investment of different properties regardless of how they are financed. A higher cap rate generally indicates a higher return but may come with higher risk. Formula: (NOI / Property Value) × 100.
- Cash on Cash Return: This measures the return on the actual cash you invested (down payment). It is crucial for understanding how hard your money is working for you. Formula: (Annual Pre-Tax Cash Flow / Total Cash Invested) × 100.
How to Use This Calculator
To get the most accurate results, input realistic numbers based on current market data. Start with the Purchase Price and your expected Down Payment to determine the loan size. Enter the Interest Rate and Loan Term to calculate the mortgage payment.
Don't forget the "hidden" costs. Vacancy rates (usually 5-10%), maintenance reserves (5-10%), and property management fees (8-12%) significantly impact your bottom line. Even if you plan to manage the property yourself, it is wise to budget for your time or future management needs.