function calculateCashFlow() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('rpc_price').value);
var downPercent = parseFloat(document.getElementById('rpc_down').value);
var rate = parseFloat(document.getElementById('rpc_rate').value);
var years = parseFloat(document.getElementById('rpc_term').value);
var income = parseFloat(document.getElementById('rpc_income').value);
var taxYearly = parseFloat(document.getElementById('rpc_tax').value);
var insuranceYearly = parseFloat(document.getElementById('rpc_insurance').value);
var maintPercent = parseFloat(document.getElementById('rpc_maintenance').value);
var vacancyPercent = parseFloat(document.getElementById('rpc_vacancy').value);
var capexMonthly = parseFloat(document.getElementById('rpc_capex').value);
// 2. Validate Inputs
if (isNaN(price) || isNaN(downPercent) || isNaN(rate) || isNaN(years) || isNaN(income)) {
alert("Please enter valid numbers for all fields.");
return;
}
// 3. Perform Calculations
// Loan Calculation
var downPayment = price * (downPercent / 100);
var loanAmount = price – downPayment;
var monthlyRate = (rate / 100) / 12;
var numPayments = years * 12;
var monthlyMortgage = 0;
if (rate === 0) {
monthlyMortgage = loanAmount / numPayments;
} else {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
}
// Expense Calculations (Monthly)
var monthlyTax = taxYearly / 12;
var monthlyInsurance = insuranceYearly / 12;
var monthlyMaintenance = income * (maintPercent / 100);
var monthlyVacancy = income * (vacancyPercent / 100);
var totalMonthlyExpenses = monthlyMortgage + monthlyTax + monthlyInsurance + monthlyMaintenance + monthlyVacancy + capexMonthly;
// Profit Metrics
var monthlyCashFlow = income – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// NOI (Net Operating Income) = Income – Operating Expenses (Excluding Mortgage)
var annualOperatingExpenses = (monthlyTax + monthlyInsurance + monthlyMaintenance + monthlyVacancy + capexMonthly) * 12;
var annualNOI = (income * 12) – annualOperatingExpenses;
// Cap Rate = Annual NOI / Purchase Price
var capRate = (annualNOI / price) * 100;
// Cash on Cash Return = Annual Cash Flow / Total Cash Invested
// Assuming Cash Invested = Down Payment for this simplified calculation (could add closing costs in a more complex version)
var cashInvested = downPayment;
// Prevent division by zero
var cashOnCash = 0;
if (cashInvested > 0) {
cashOnCash = (annualCashFlow / cashInvested) * 100;
}
// 4. Update UI
document.getElementById('rpc_results_area').style.display = 'block';
// Format Currency Helper
var fmt = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
document.getElementById('res_mortgage').innerHTML = fmt.format(monthlyMortgage);
document.getElementById('res_expenses').innerHTML = fmt.format(totalMonthlyExpenses);
document.getElementById('res_noi').innerHTML = fmt.format(annualNOI);
document.getElementById('res_cap').innerHTML = capRate.toFixed(2) + "%";
document.getElementById('res_coc').innerHTML = cashOnCash.toFixed(2) + "%";
var cfElement = document.getElementById('res_cashflow');
cfElement.innerHTML = fmt.format(monthlyCashFlow);
if (monthlyCashFlow >= 0) {
cfElement.className = "rpc-result-value rpc-highlight";
} else {
cfElement.className = "rpc-result-value rpc-highlight-negative";
}
}
Understanding Rental Property Cash Flow
Successful real estate investing hinges on one crucial metric: Cash Flow. This Rental Property Cash Flow Calculator is designed to help investors evaluate the potential profitability of a residential investment property before signing on the dotted line. By inputting specific data points regarding the loan, income, and expenses, you can determine if a property is an asset or a liability.
How is Rental Cash Flow Calculated?
Cash flow is the net amount of money moving into and out of a business. In real estate, it is calculated as:
Cash Flow = Total Monthly Rental Income – Total Monthly Expenses
However, "Expenses" includes more than just the mortgage. A comprehensive calculation must include:
Principal & Interest (P&I): The monthly debt service to the lender.
Property Taxes & Insurance: Recurring costs that persist even after the mortgage is paid off.
Vacancy Rate: An estimated percentage (typically 5-8%) of income lost due to tenant turnover.
Maintenance & CapEx: Money set aside for repairs (leaky faucets) and capital expenditures (new roof, HVAC).
Key Metrics Explained
Beyond simple cash flow, this calculator provides advanced metrics to help compare different investment opportunities:
1. Net Operating Income (NOI)
NOI calculates the profitability of the property irrespective of the financing. It is the Total Income minus Operating Expenses (excluding mortgage payments). This metric is essential for calculating the Cap Rate.
2. Cap Rate (Capitalization Rate)
The Cap Rate measures the natural rate of return on the property. It is calculated by dividing the Annual NOI by the Purchase Price. A higher Cap Rate generally indicates a better return, though often comes with higher risk.
3. Cash on Cash Return (CoC)
This is arguably the most important metric for investors using leverage (loans). It measures the annual cash flow relative to the actual cash you invested (Down Payment + Closing Costs). A 10% CoC means you earn back 10% of your invested capital per year in cash flow alone.
Example Scenario
Imagine purchasing a property for $200,000 with a 20% down payment ($40,000). The mortgage is $1,000/month, and other expenses (taxes, insurance, reserves) total $500/month. If the property rents for $1,800/month:
Total Expenses: $1,500
Monthly Cash Flow: $300
Annual Cash Flow: $3,600
Cash on Cash Return: $3,600 / $40,000 = 9%
Use the calculator above to run your own numbers and ensure your next investment yields positive cash flow.