function calculateRentalROI() {
// 1. Get Inputs using var
var price = parseFloat(document.getElementById('purchasePrice').value);
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 vacancy = parseFloat(document.getElementById('vacancyRate').value);
var tax = parseFloat(document.getElementById('annualTaxes').value);
var insurance = parseFloat(document.getElementById('annualInsurance').value);
var maint = parseFloat(document.getElementById('monthlyMaintenance').value);
var closing = parseFloat(document.getElementById('closingCosts').value);
// Validation
if (isNaN(price) || isNaN(down) || isNaN(rate) || isNaN(years) || isNaN(rent)) {
alert("Please enter valid numbers in all fields.");
return;
}
// 2. Mortgage Calculation (Principal & Interest)
var loanAmount = price – down;
var monthlyRate = (rate / 100) / 12;
var totalMonths = years * 12;
var mortgagePayment = 0;
if (rate > 0) {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalMonths)) / (Math.pow(1 + monthlyRate, totalMonths) – 1);
} else {
mortgagePayment = loanAmount / totalMonths;
}
// 3. Operating Data Calculations
var monthlyTax = tax / 12;
var monthlyIns = insurance / 12;
var vacancyLoss = rent * (vacancy / 100);
// Effective Gross Income
var effectiveIncome = rent – vacancyLoss;
// Total Monthly Expenses (Excluding Mortgage for NOI, Including for Cash Flow)
var operatingExpenses = monthlyTax + monthlyIns + maint;
var totalExpenses = operatingExpenses + mortgagePayment;
// 4. Key Metrics
var noiMonthly = effectiveIncome – operatingExpenses;
var cashFlowMonthly = effectiveIncome – totalExpenses;
var cashFlowAnnual = cashFlowMonthly * 12;
// Cash Invested (Down Payment + Closing Costs)
var totalCashInvested = down + closing;
// ROI Calculations
var cocReturn = 0;
if (totalCashInvested > 0) {
cocReturn = (cashFlowAnnual / totalCashInvested) * 100;
}
var capRate = 0;
if (price > 0) {
capRate = ((noiMonthly * 12) / price) * 100;
}
// 5. Display Results
document.getElementById('calc-results').style.display = 'block';
document.getElementById('resMortgage').innerText = formatCurrency(mortgagePayment);
document.getElementById('resExpenses').innerText = formatCurrency(totalExpenses);
document.getElementById('resNOI').innerText = formatCurrency(noiMonthly);
var flowEl = document.getElementById('resMonthlyCashFlow');
flowEl.innerText = formatCurrency(cashFlowMonthly);
flowEl.className = cashFlowMonthly >= 0 ? 'result-value positive-flow' : 'result-value negative-flow';
var annualFlowEl = document.getElementById('resAnnualCashFlow');
annualFlowEl.innerText = formatCurrency(cashFlowAnnual);
annualFlowEl.className = cashFlowAnnual >= 0 ? 'result-value positive-flow' : 'result-value negative-flow';
document.getElementById('resCoC').innerText = cocReturn.toFixed(2) + "%";
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + "%";
}
function formatCurrency(num) {
return "$" + num.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
}
Understanding Rental Property Cash Flow Analysis
Investing in real estate is one of the most reliable ways to build long-term wealth, but success depends heavily on the numbers. This Rental Property Cash Flow Calculator helps investors analyze a potential deal by determining the monthly cash flow, Cap Rate, and Cash-on-Cash return.
Why Cash Flow Matters
Cash flow is the net amount of money moving in and out of a business. In real estate, positive cash flow means your property generates more income than it costs to operate. This surplus can be reinvested, saved, or used as passive income. Negative cash flow, on the other hand, means the property is losing money every month, which creates a financial liability.
Key Metrics Calculated
To truly evaluate an investment property, you must look beyond just the rent check. Our calculator breaks down three essential metrics:
Net Operating Income (NOI): This is your annual rental income minus all operating expenses (vacancy, taxes, insurance, maintenance), but before mortgage payments. It measures the profitability of the property itself, independent of financing.
Cash-on-Cash Return (CoC): This metric compares your annual pre-tax cash flow to the total cash invested (down payment + closing costs). It is crucial for understanding the efficiency of your invested capital compared to other investment vehicles like stocks or bonds.
Cap Rate (Capitalization Rate): The ratio of Net Operating Income to the property's asset value. It helps compare properties across different markets regardless of how they are financed. A higher Cap Rate generally indicates a higher potential return, but often comes with higher risk.
Inputs Explained
To get the most accurate result from this calculator, ensure you have precise estimates for the following:
Vacancy Rate: No property is occupied 100% of the time. A standard conservative estimate is 5% to 8% to account for turnover periods.
Maintenance & HOA: Set aside funds for repairs. A common rule of thumb is budgeting 1% of the property value annually or 10% of monthly rent for maintenance.
Closing Costs: Don't forget the upfront fees required to close the loan, which typically range from 2% to 5% of the purchase price.
How to Improve Your ROI
If the calculator shows negative cash flow or a low return, consider negotiating a lower purchase price, shopping for a lower interest rate, or looking for ways to increase the rental income (e.g., renovations or adding amenities). Analyzing multiple scenarios with this calculator is the best way to find a deal that meets your financial goals.