Rental Property ROI Calculator
.roi-calculator-container {
max-width: 800px;
margin: 0 auto;
font-family: -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif;
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padding: 30px;
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.roi-header h2 {
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margin-top: 20px;
margin-bottom: 10px;
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transition: background-color 0.3s;
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margin-bottom: 5px;
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.positive { color: #27ae60; }
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margin-top: 50px;
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margin-bottom: 15px;
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@media (max-width: 600px) {
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}
Understanding Rental Property ROI
Calculating the Return on Investment (ROI) for a rental property is crucial for making informed real estate decisions. This calculator helps investors analyze the profitability of a potential purchase by breaking down income, expenses, and key performance metrics.
Key Metrics Explained
- Cash Flow: The net amount of cash moving in or out of the investment each month after all operating expenses and mortgage payments are made. Positive cash flow indicates a profitable operational state.
- Cash on Cash Return: A ratio that calculates the cash income earned on the cash invested in the property. It is calculated by dividing the annual pre-tax cash flow by the total cash invested (down payment + closing costs). A "good" CoC return varies by market, but many investors look for 8-12% or higher.
- Cap Rate (Capitalization Rate): Indicates the potential return on an investment property assuming it was bought with cash (no loan). It is calculated by dividing the Net Operating Income (NOI) by the current market value or acquisition cost. Cap rates help compare properties without the influence of financing terms.
- Net Operating Income (NOI): The total revenue from the property minus all necessary operating expenses. NOI excludes mortgage payments (principal and interest) and is a pure measure of the property's ability to generate revenue.
How to Use This Calculator
Enter the property's purchase details, including price and closing costs. Adjust financing terms to match your loan offer. Input your expected monthly rental income and estimate your vacancy rate (typically 5-10% depending on the market).
Be honest with your expense estimates. Include annual costs for taxes, insurance, HOA fees, and maintenance. If you plan to hire a property manager, include their fee percentage (usually 8-10%). The calculator will instantly generate your financial analysis.
function calculateROI() {
// Get Input Values
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value) || 0;
var closingCosts = parseFloat(document.getElementById('closingCosts').value) || 0;
var downPaymentPercent = parseFloat(document.getElementById('downPaymentPercent').value) || 0;
var interestRate = parseFloat(document.getElementById('interestRate').value) || 0;
var loanTerm = parseFloat(document.getElementById('loanTerm').value) || 0;
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value) || 0;
var propertyTax = parseFloat(document.getElementById('propertyTax').value) || 0;
var insurance = parseFloat(document.getElementById('insurance').value) || 0;
var hoaDues = parseFloat(document.getElementById('hoaDues').value) || 0;
var maintenance = parseFloat(document.getElementById('maintenance').value) || 0;
var managementFeePercent = parseFloat(document.getElementById('managementFee').value) || 0;
// Basic Calculations
var downPaymentAmount = purchasePrice * (downPaymentPercent / 100);
var loanAmount = purchasePrice – downPaymentAmount;
var totalCashInvested = downPaymentAmount + closingCosts;
// Monthly Mortgage Calculation
var monthlyMortgage = 0;
if (loanAmount > 0 && interestRate > 0 && loanTerm > 0) {
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
// Income Calculations
var vacancyLoss = monthlyRent * (vacancyRate / 100);
var effectiveMonthlyIncome = monthlyRent – vacancyLoss;
// Monthly Expenses Calculations
var monthlyTax = propertyTax / 12;
var monthlyInsurance = insurance / 12;
var monthlyHOA = hoaDues / 12;
var monthlyMaintenance = maintenance / 12;
var monthlyManagementFee = monthlyRent * (managementFeePercent / 100); // Usually based on gross rent collected
var totalOperatingExpensesMonthly = monthlyTax + monthlyInsurance + monthlyHOA + monthlyMaintenance + monthlyManagementFee;
var totalMonthlyExpenses = totalOperatingExpensesMonthly + monthlyMortgage;
// Net Operating Income (Annual)
// NOI = (Gross Income – Vacancy) – Operating Expenses. Excludes Mortgage.
var annualNOI = (effectiveMonthlyIncome * 12) – (totalOperatingExpensesMonthly * 12);
// Cash Flow
var monthlyCashFlow = effectiveMonthlyIncome – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// Returns Calculations
var capRate = 0;
if (purchasePrice > 0) {
capRate = (annualNOI / purchasePrice) * 100;
}
var cashOnCash = 0;
if (totalCashInvested > 0) {
cashOnCash = (annualCashFlow / totalCashInvested) * 100;
}
// Formatting Helper
function formatCurrency(num) {
return '$' + num.toLocaleString('en-US', {minimumFractionDigits: 0, maximumFractionDigits: 0});
}
function formatPercent(num) {
return num.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2}) + '%';
}
// Update UI
var cashFlowEl = document.getElementById('monthlyCashFlow');
cashFlowEl.innerText = formatCurrency(monthlyCashFlow);
cashFlowEl.className = 'roi-result-value ' + (monthlyCashFlow >= 0 ? 'positive' : 'negative');
var cocEl = document.getElementById('cashOnCash');
cocEl.innerText = formatPercent(cashOnCash);
cocEl.className = 'roi-result-value ' + (cashOnCash >= 0 ? 'positive' : 'negative');
document.getElementById('capRate').innerText = formatPercent(capRate);
document.getElementById('noi').innerText = formatCurrency(annualNOI);
document.getElementById('totalCashInvested').innerText = formatCurrency(totalCashInvested);
document.getElementById('totalMonthlyExpenses').innerText = formatCurrency(totalMonthlyExpenses);
// Show Results
document.getElementById('results').style.display = 'block';
// Smooth scroll to results
document.getElementById('results').scrollIntoView({ behavior: 'smooth' });
}