function calculateRental() {
// Get Inputs
var price = parseFloat(document.getElementById("propPrice").value) || 0;
var downPercent = parseFloat(document.getElementById("downPayment").value) || 0;
var rate = parseFloat(document.getElementById("intRate").value) || 0;
var term = parseFloat(document.getElementById("loanTerm").value) || 0;
var rent = parseFloat(document.getElementById("monthlyRent").value) || 0;
var tax = parseFloat(document.getElementById("propTax").value) || 0;
var ins = parseFloat(document.getElementById("insurance").value) || 0;
var maint = parseFloat(document.getElementById("maintenance").value) || 0;
var hoa = parseFloat(document.getElementById("hoa").value) || 0;
var other = parseFloat(document.getElementById("otherExp").value) || 0;
// Calculations
var downAmount = price * (downPercent / 100);
var loanAmount = price – downAmount;
// Mortgage P&I
var monthlyRate = rate / 100 / 12;
var numPayments = term * 12;
var mortgage = 0;
if (rate > 0 && term > 0) {
mortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
} else if (term > 0) {
mortgage = loanAmount / numPayments;
}
var operatingExpenses = tax + ins + maint + hoa + other;
var totalExpenses = mortgage + operatingExpenses;
var monthlyCashFlow = rent – totalExpenses;
// Annual Figures
var annualCashFlow = monthlyCashFlow * 12;
var annualNOI = (rent – operatingExpenses) * 12;
// Metrics
var cashInvested = downAmount; // Simplified: assumes no closing costs for basic calc
var cocReturn = 0;
if (cashInvested > 0) {
cocReturn = (annualCashFlow / cashInvested) * 100;
}
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
// Display Results
document.getElementById("resultsArea").style.display = "block";
document.getElementById("resMortgage").innerHTML = "$" + mortgage.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resTotalExpenses").innerHTML = "$" + totalExpenses.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resNOI").innerHTML = "$" + (annualNOI / 12).toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
var cfElement = document.getElementById("resCashFlow");
cfElement.innerHTML = "$" + monthlyCashFlow.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Formatting colors for positive/negative cash flow
if (monthlyCashFlow < 0) {
cfElement.classList.add("negative");
cfElement.classList.remove("highlight-result");
} else {
cfElement.classList.remove("negative");
cfElement.classList.add("highlight-result");
}
document.getElementById("resCoC").innerHTML = cocReturn.toFixed(2) + "%";
document.getElementById("resCapRate").innerHTML = capRate.toFixed(2) + "%";
}
Understanding Rental Property Cash Flow
Investing in real estate is one of the most reliable ways to build wealth, but not every property is a good deal. The key to successful real estate investing is analyzing the numbers before you buy. Our Rental Property Cash Flow Calculator helps you determine if a potential investment will generate income or drain your bank account.
What is Cash Flow?
Cash flow is the net amount of cash moving into or out of a business or investment. In real estate, it is calculated as:
Cash Flow = Total Rental Income – Total Expenses (Mortgage, Taxes, Insurance, etc.)
Positive Cash Flow: You earn profit every month after paying all bills.
Negative Cash Flow: You lose money every month to keep the property running.
Key Metrics Analyzed by This Calculator
1. Net Operating Income (NOI)
NOI is a calculation used to analyze the profitability of income-generating real estate investments. NOI equals all revenue from the property, minus all reasonably necessary operating expenses. Note that NOI measures the property's ability to generate revenue independent of your mortgage financing.
2. Cash on Cash Return (CoC)
This is arguably the most important metric for investors. It measures the annual return you made on the actual cash you invested (Down Payment + Closing Costs). It tells you how hard your money is working for you.
Formula: (Annual Cash Flow / Total Cash Invested) x 100
Good Target: Many investors aim for a CoC return of 8-12% or higher.
3. Cap Rate (Capitalization Rate)
Cap Rate measures the natural rate of return on an investment property assuming it was paid for fully in cash. It is useful for comparing the profitability of different properties regardless of how they are financed.
How to Maximize Your Rental Cash Flow
If the calculator shows negative or low cash flow, consider these strategies:
Increase Rent: Are you charging market rates? Small increases can significantly boost your bottom line.
Decrease Expenses: Shop around for cheaper insurance, appeal your property taxes, or manage the property yourself to save on management fees.
Larger Down Payment: Putting more money down reduces your monthly mortgage payment, instantly increasing cash flow.
Improve the Property: Strategic renovations can justify higher rent prices.
Frequently Asked Questions
Does this calculator include vacancy rates?
To keep the calculator simple, we have not included a specific field for vacancy. However, you can account for vacancy by reducing your "Monthly Rental Income" input (e.g., use 90% of the expected rent) or adding a vacancy amount to "Other Monthly Expenses".
Why is my Cash on Cash Return infinite?
If you purchase a property with $0 down (100% financing), your denominator in the equation is zero, resulting in an infinite return calculation. This is often referred to as an "infinite return" strategy in real estate.