Analyze the Cash Flow, Cap Rate, and ROI of your real estate investment.
Net Operating Income (NOI) / Year:$0.00
Monthly Mortgage Payment:$0.00
Monthly Cash Flow:$0.00
Cap Rate:0.00%
Cash on Cash Return (ROI):0.00%
function calculateRentalROI() {
// 1. Get Values
var price = parseFloat(document.getElementById('purchasePrice').value);
var downPayment = parseFloat(document.getElementById('downPayment').value);
var closingCosts = parseFloat(document.getElementById('closingCosts').value);
var interestRate = parseFloat(document.getElementById('interestRate').value);
var termYears = parseFloat(document.getElementById('loanTerm').value);
var rent = parseFloat(document.getElementById('monthlyRent').value);
var expenses = parseFloat(document.getElementById('monthlyExpenses').value);
// 2. Validation
if (isNaN(price) || isNaN(downPayment) || isNaN(rent) || isNaN(expenses)) {
alert("Please fill in all the main financial fields (Price, Down Payment, Rent, Expenses) to calculate.");
return;
}
// Set defaults for optional fields if empty to avoid NaN
if (isNaN(closingCosts)) closingCosts = 0;
if (isNaN(interestRate)) interestRate = 0;
if (isNaN(termYears)) termYears = 30;
// 3. Logic
var loanAmount = price – downPayment;
var monthlyMortgage = 0;
// Mortgage Calculation
if (loanAmount > 0 && interestRate > 0) {
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = termYears * 12;
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
var grossAnnualIncome = rent * 12;
var annualExpenses = expenses * 12;
var noi = grossAnnualIncome – annualExpenses; // Net Operating Income
var annualDebtService = monthlyMortgage * 12;
var annualCashFlow = noi – annualDebtService;
var monthlyCashFlow = annualCashFlow / 12;
var totalInitialInvestment = downPayment + closingCosts;
// Ratios
var capRate = 0;
if (price > 0) {
capRate = (noi / price) * 100;
}
var cashOnCash = 0;
if (totalInitialInvestment > 0) {
cashOnCash = (annualCashFlow / totalInitialInvestment) * 100;
}
// 4. Formatting Output
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
document.getElementById('resNOI').innerText = formatter.format(noi);
document.getElementById('resMortgage').innerText = formatter.format(monthlyMortgage);
var flowEl = document.getElementById('resCashFlow');
flowEl.innerText = formatter.format(monthlyCashFlow);
if(monthlyCashFlow >= 0) {
flowEl.className = "result-value positive";
} else {
flowEl.className = "result-value negative";
}
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + "%";
var cocEl = document.getElementById('resCOC');
cocEl.innerText = cashOnCash.toFixed(2) + "%";
if(cashOnCash >= 0) {
cocEl.className = "result-value positive";
} else {
cocEl.className = "result-value negative";
}
// Show results
document.getElementById('results').style.display = 'block';
}
Understanding Real Estate Profitability Metrics
Investing in real estate is one of the most reliable ways to build wealth, but simply buying a property and renting it out doesn't guarantee a profit. To succeed, investors rely on specific mathematical formulas to evaluate deals objectively. Our Rental Property Profitability Calculator helps you run these numbers quickly.
What is Net Operating Income (NOI)?
NOI is the foundation of real estate analysis. It represents the total income the property generates minus all necessary operating expenses. Crucially, NOI excludes mortgage payments (debt service) and capital expenditures. It gives you a clear picture of the property's ability to generate revenue purely based on its operations.
Formula: Gross Rental Income – Operating Expenses = NOI
Capitalization Rate (Cap Rate)
The Cap Rate measures the natural rate of return on the property assuming you paid for it in all cash. It allows you to compare different properties regardless of how they are financed. A higher cap rate generally implies a better return but may come with higher risk (e.g., a property in a declining neighborhood). Most investors look for cap rates between 4% and 10% depending on the market.
Cash on Cash Return
This is arguably the most important metric for investors using leverage (mortgages). It calculates the cash income earned on the cash invested. Unlike Cap Rate, this metric does factor in your mortgage payments.
For example, if you invest $50,000 (down payment + closing costs) and the property generates $5,000 in positive cash flow per year after paying the mortgage and expenses, your Cash on Cash return is 10%. This allows you to compare real estate returns directly against other investments like stocks or bonds.
Calculating Monthly Cash Flow
Positive cash flow means the rent covers the mortgage, taxes, insurance, repairs, and vacancies, with money left over. Negative cash flow means you are paying out of pocket every month to hold the property. While some investors accept negative cash flow in exchange for high appreciation potential, a sustainable rental portfolio is usually built on positive cash flow.
How to Use This Calculator
Monthly Expenses: Be realistic. Don't just include taxes and insurance. Factor in maintenance (usually 5-10% of rent), vacancy (5-8%), and property management fees (8-10%) if applicable.
Closing Costs: Don't forget to add 2-5% of the purchase price for closing costs and any immediate rehab or repair costs needed to get the property rent-ready.
Interest Rate: Use current market rates for investment properties, which are typically 0.5% to 1% higher than primary residence mortgage rates.