function calculateRental() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('rc_price').value) || 0;
var downPct = parseFloat(document.getElementById('rc_down').value) || 0;
var rate = parseFloat(document.getElementById('rc_rate').value) || 0;
var years = parseFloat(document.getElementById('rc_years').value) || 0;
var rent = parseFloat(document.getElementById('rc_rent').value) || 0;
var taxYear = parseFloat(document.getElementById('rc_tax').value) || 0;
var insYear = parseFloat(document.getElementById('rc_ins').value) || 0;
var hoa = parseFloat(document.getElementById('rc_hoa').value) || 0;
var vacancyPct = parseFloat(document.getElementById('rc_vacancy').value) || 0;
var maintPct = parseFloat(document.getElementById('rc_maint').value) || 0;
var capexPct = parseFloat(document.getElementById('rc_capex').value) || 0;
var pmPct = parseFloat(document.getElementById('rc_pm').value) || 0;
// 2. Calculate Mortgage
var downAmount = price * (downPct / 100);
var loanAmount = price – downAmount;
var monthlyRate = (rate / 100) / 12;
var numPayments = years * 12;
var monthlyMortgage = 0;
if (rate > 0 && years > 0) {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
} else if (years > 0) {
monthlyMortgage = loanAmount / numPayments;
}
// 3. Calculate Monthly Operating Expenses
var taxMo = taxYear / 12;
var insMo = insYear / 12;
var vacancyMo = rent * (vacancyPct / 100);
var maintMo = rent * (maintPct / 100);
var capexMo = rent * (capexPct / 100);
var pmMo = rent * (pmPct / 100);
var totalOpExpMo = taxMo + insMo + hoa + vacancyMo + maintMo + capexMo + pmMo;
var totalExpMo = totalOpExpMo + monthlyMortgage;
// 4. Calculate Key Metrics
var cashFlowMo = rent – totalExpMo;
var cashFlowYr = cashFlowMo * 12;
var noiMo = rent – totalOpExpMo;
var noiYr = noiMo * 12;
// Cap Rate = (NOI / Current Market Value) * 100
var capRate = 0;
if (price > 0) {
capRate = (noiYr / price) * 100;
}
// Cash on Cash = (Annual Pre-Tax Cash Flow / Total Cash Invested) * 100
// Assuming Closing Costs are roughly 3% of purchase price for calculation accuracy
var closingCosts = price * 0.03;
var totalCashInvested = downAmount + closingCosts;
var cocReturn = 0;
if (totalCashInvested > 0) {
cocReturn = (cashFlowYr / totalCashInvested) * 100;
}
// 5. Display Results
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
document.getElementById('res_income').innerText = formatter.format(rent);
document.getElementById('res_mortgage').innerText = formatter.format(monthlyMortgage);
document.getElementById('res_expenses').innerText = formatter.format(totalExpMo);
var cfEl = document.getElementById('res_cashflow');
cfEl.innerText = formatter.format(cashFlowMo);
if (cashFlowMo < 0) {
cfEl.classList.add('negative-flow');
cfEl.classList.remove('highlight-result');
} else {
cfEl.classList.remove('negative-flow');
cfEl.classList.add('highlight-result');
}
document.getElementById('res_noi').innerText = formatter.format(noiYr);
document.getElementById('res_cap').innerText = capRate.toFixed(2) + '%';
document.getElementById('res_coc').innerText = cocReturn.toFixed(2) + '%';
document.getElementById('rc_results').style.display = 'block';
}
What is Rental Property Cash Flow?
Rental property cash flow is the net amount of cash left over after all rental expenses have been paid. It is the lifeblood of real estate investing. If your cash flow is positive, the property pays for itself and provides you with monthly income. If it is negative, you are paying out of pocket every month to hold the property.
Calculating cash flow accurately requires more than just subtracting the mortgage from the rent. You must account for vacancy, repairs, capital expenditures (CapEx), taxes, insurance, and property management.
How the Formula Works
The calculation is performed in three main steps:
Gross Income: Your total monthly rental income.
Operating Expenses: This includes property taxes, insurance, HOA fees, vacancy reserves, maintenance reserves, and management fees.
Net Operating Income (NOI): Gross Income minus Operating Expenses.
Cash Flow: NOI minus Debt Service (your mortgage principal and interest payment).
Formula:Cash Flow = Income – (Operating Expenses + Mortgage Payment)
Understanding Key Investment Metrics
This calculator provides three critical metrics to evaluate your deal:
Cash Flow: The actual dollar amount you pocket every month. Most investors look for at least $100-$200 per door per month.
Cap Rate (Capitalization Rate): Calculated as (NOI / Purchase Price). This measures the natural rate of return of the property assuming you paid all cash. It helps compare properties regardless of financing.
Cash on Cash Return (CoC): Calculated as (Annual Cash Flow / Total Cash Invested). This measures how hard your actual invested money (down payment + closing costs) is working for you. A good CoC return often beats the stock market average (8-10%).
Real-World Example
The "250k Starter Home" Scenario
Let's say you buy a property for $250,000 with 20% down ($50,000).
Mortgage: At 6.5% interest over 30 years, your P&I payment is roughly $1,264.
Expenses: Taxes ($250/mo), Insurance ($100/mo), and reserves for vacancy/repairs ($220/mo) total about $570/mo.
Rent: You rent the property for $2,200/mo.
Result: $2,200 (Rent) – $1,264 (Mortgage) – $570 (Expenses) = $366 Monthly Cash Flow. This represents a solid, cash-flowing asset.
Tips for Maximizing Cash Flow
To improve your calculator results and real-world returns:
Force Appreciation: Renovate the property to increase the rent you can charge.
Reduce Vacancy: Keep tenants happy and respond quickly to maintenance requests to reduce turnover.
Shop for Insurance: Insurance premiums vary wildly; get multiple quotes annually.
Challenge Tax Assessments: If your property tax assessment is higher than the market value, file an appeal.