function calculateRental() {
// Get Inputs
var price = parseFloat(document.getElementById('purchasePrice').value);
var downPct = parseFloat(document.getElementById('downPaymentPercent').value);
var rate = parseFloat(document.getElementById('interestRate').value);
var term = parseFloat(document.getElementById('loanTerm').value);
var closing = parseFloat(document.getElementById('closingCosts').value) || 0;
var rent = parseFloat(document.getElementById('monthlyRent').value);
var vacRate = parseFloat(document.getElementById('vacancyRate').value);
var tax = parseFloat(document.getElementById('propTax').value) || 0;
var ins = parseFloat(document.getElementById('propIns').value) || 0;
var repairPct = parseFloat(document.getElementById('repairs').value) || 0;
var capexPct = parseFloat(document.getElementById('capex').value) || 0;
var mgmtPct = parseFloat(document.getElementById('propMgmt').value) || 0;
// Validation
if (isNaN(price) || isNaN(rent) || isNaN(rate) || isNaN(term)) {
alert("Please fill in at least Purchase Price, Interest Rate, Loan Term, and Monthly Rent.");
return;
}
// 1. Loan Calculations
var downAmt = price * (downPct / 100);
var loanAmt = price – downAmt;
var monthlyRate = (rate / 100) / 12;
var numPayments = term * 12;
// Mortgage PMT Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
var mortgagePmt = 0;
if (rate > 0) {
mortgagePmt = loanAmt * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
} else {
mortgagePmt = loanAmt / numPayments;
}
// 2. Income Calculations
var vacancyLoss = rent * (vacRate / 100);
var effectiveIncome = rent – vacancyLoss;
// 3. Operating Expenses (Monthly)
var monthlyTax = tax / 12;
var monthlyIns = ins / 12;
var monthlyRepairs = rent * (repairPct / 100);
var monthlyCapex = rent * (capexPct / 100);
var monthlyMgmt = rent * (mgmtPct / 100);
var totalOpExpenses = monthlyTax + monthlyIns + monthlyRepairs + monthlyCapex + monthlyMgmt;
var totalExpensesWithMortgage = totalOpExpenses + mortgagePmt;
// 4. Key Metrics
var monthlyCashFlow = effectiveIncome – totalExpensesWithMortgage;
var annualCashFlow = monthlyCashFlow * 12;
// NOI (Net Operating Income) = Annual Income – Annual Operating Expenses (Excluding Mortgage)
var annualNOI = (effectiveIncome * 12) – (totalOpExpenses * 12);
// Cash on Cash Return = Annual Cash Flow / Total Cash Invested
var totalCashInvested = downAmt + closing;
var cocReturn = (annualCashFlow / totalCashInvested) * 100;
// Cap Rate = Annual NOI / Purchase Price
var capRate = (annualNOI / price) * 100;
// Display Results
document.getElementById('results-area').style.display = 'block';
document.getElementById('resGrossInc').innerText = formatCurrency(effectiveIncome);
document.getElementById('resTotalExp').innerText = formatCurrency(totalExpensesWithMortgage);
var cfElem = document.getElementById('resCashFlow');
cfElem.innerText = formatCurrency(monthlyCashFlow);
cfElem.className = "result-value " + (monthlyCashFlow >= 0 ? "positive" : "negative");
document.getElementById('resNOI').innerText = formatCurrency(annualNOI);
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + "%";
var cocElem = document.getElementById('resCoC');
cocElem.innerText = cocReturn.toFixed(2) + "%";
cocElem.className = "result-value " + (cocReturn >= 0 ? "positive" : "negative");
}
function formatCurrency(num) {
return "$" + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}
Understanding Real Estate Cash Flow
Investing in rental properties is one of the most reliable ways to build long-term wealth, but success hinges on the numbers. This Rental Property Cash Flow Calculator helps investors determine if a property is an asset or a liability before signing the deed.
What is Rental Cash Flow?
Cash flow is the profit left over after you have collected the rent and paid all operating expenses and debt service (mortgage). Positive cash flow means your bank account grows every month, while negative cash flow implies the property is costing you money to hold.
The formula is simple: Cash Flow = Gross Income – Operating Expenses – Debt Service.
Key Metrics Explained
Net Operating Income (NOI): This calculates the profitability of the property itself, excluding financing costs. It represents the annual income minus annual operating expenses (taxes, insurance, repairs, vacancy). It is crucial for comparing properties regardless of how they are financed.
Cap Rate (Capitalization Rate): Calculated as NOI / Purchase Price. This percentage measures the natural rate of return on the property. A higher Cap Rate generally indicates a better return, though often comes with higher risk.
Cash-on-Cash Return (CoC): This is arguably the most important metric for investors using leverage. It measures the annual cash flow relative to the actual cash you invested (Down Payment + Closing Costs). A 10% CoC return means you earn back 10% of your invested capital per year in cash flow alone.
Hidden Expenses to Watch For
Many new investors fail because they underestimate expenses. When using this calculator, ensure you account for:
Vacancy: Properties are rarely 100% occupied. A standard 5-8% vacancy rate provision is prudent.
CapEx (Capital Expenditures): Big-ticket items like roof replacements or HVAC systems don't happen monthly, but you must save for them monthly. Allocating 5-10% of rent for CapEx ensures you have funds when things break.
Property Management: Even if you plan to self-manage, it is wise to factor in a management fee (usually 8-10%) to ensure the deal still works if you decide to hire a professional later.
How to Interpret Your Results
If your Monthly Cash Flow is negative, the property is a liability. Unless you are banking purely on aggressive appreciation (a risky strategy), you should negotiate a lower price or find a different deal. A healthy rental property typically generates positive cash flow with a Cash-on-Cash return that beats the stock market average or inflation.