Analyze your real estate investment potential instantly.
Monthly Mortgage (P&I):$0.00
Total Monthly Expenses:$0.00
Net Operating Income (Monthly):$0.00
Net Monthly Cash Flow:$0.00
Cash on Cash ROI:0.00%
Cap Rate:0.00%
function calculateRentalROI() {
// 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 term = parseFloat(document.getElementById('rpc_term').value);
var rent = parseFloat(document.getElementById('rpc_rent').value);
var opExInput = parseFloat(document.getElementById('rpc_expenses').value);
var vacancyRate = parseFloat(document.getElementById('rpc_vacancy').value);
var closingCosts = parseFloat(document.getElementById('rpc_closing').value);
// 2. Validate Inputs
if (isNaN(price) || isNaN(rent) || isNaN(opExInput)) {
alert("Please fill in at least Purchase Price, Rent, and Monthly Expenses to calculate.");
return;
}
// Handle defaults for empty optional fields
if (isNaN(downPercent)) downPercent = 0;
if (isNaN(rate)) rate = 0;
if (isNaN(term)) term = 30;
if (isNaN(vacancyRate)) vacancyRate = 0;
if (isNaN(closingCosts)) closingCosts = 0;
// 3. Perform Calculations
// Loan Calculations
var downPaymentAmount = price * (downPercent / 100);
var loanAmount = price – downPaymentAmount;
var monthlyMortgage = 0;
if (loanAmount > 0 && rate > 0) {
var monthlyRate = rate / 100 / 12;
var numPayments = term * 12;
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
} else if (loanAmount > 0 && rate === 0) {
monthlyMortgage = loanAmount / (term * 12);
}
// Expense Calculations
var vacancyCost = rent * (vacancyRate / 100);
var totalMonthlyExpenses = opExInput + vacancyCost; // Operating expenses (excluding mortgage)
var totalExpensesWithMortgage = totalMonthlyExpenses + monthlyMortgage;
// Income Calculations
var noiMonthly = rent – totalMonthlyExpenses; // Net Operating Income
var cashFlowMonthly = noiMonthly – monthlyMortgage;
var cashFlowAnnual = cashFlowMonthly * 12;
// ROI Metrics
var totalInitialInvestment = downPaymentAmount + closingCosts;
var cocRoi = 0;
if (totalInitialInvestment > 0) {
cocRoi = (cashFlowAnnual / totalInitialInvestment) * 100;
}
var capRate = 0;
if (price > 0) {
capRate = ((noiMonthly * 12) / price) * 100;
}
// 4. Update UI
document.getElementById('rpc_results').style.display = 'block';
// Format Currency Function
var fmt = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
document.getElementById('rpc_res_mortgage').innerText = fmt.format(monthlyMortgage);
document.getElementById('rpc_res_expenses').innerText = fmt.format(totalMonthlyExpenses);
document.getElementById('rpc_res_noi').innerText = fmt.format(noiMonthly);
var cfElement = document.getElementById('rpc_res_cashflow');
cfElement.innerText = fmt.format(cashFlowMonthly);
if (cashFlowMonthly < 0) {
cfElement.className = "rpc-result-value rpc-negative";
} else {
cfElement.className = "rpc-result-value rpc-highlight";
}
document.getElementById('rpc_res_coc').innerText = cocRoi.toFixed(2) + "%";
document.getElementById('rpc_res_cap').innerText = capRate.toFixed(2) + "%";
}
Understanding Rental Property ROI
Investing in real estate is a powerful wealth-building strategy, but success depends entirely on the numbers. Unlike buying a primary residence based on emotion, buying a rental property requires cold, hard analysis. Our Rental Property Cash Flow Calculator helps you determine if a potential deal will put money in your pocket or drain your bank account.
Key Metrics Explained
1. Net Monthly Cash Flow
This is the most critical number for buy-and-hold investors. It represents the profit left over after all expenses and mortgage payments are made. Positive cash flow ensures the property pays for itself and generates passive income.
Cash on Cash ROI measures the annual return on the actual cash you invested (down payment + closing costs), rather than the total purchase price. This metric allows you to compare real estate returns against other investment vehicles like stocks or bonds.
Example: If you invest $50,000 cash to buy a property and it generates $5,000 in annual profit, your CoC ROI is 10%.
3. Cap Rate (Capitalization Rate)
Cap Rate measures the property's natural rate of return assuming you bought it in all cash (no mortgage). It is calculated by dividing the Net Operating Income (NOI) by the Purchase Price. Cap Rate is excellent for comparing the profitability of similar properties regardless of financing.
Realistic Example Calculation
Let's assume you are analyzing a single-family home with the following details:
Using these numbers, your monthly mortgage payment (Principal & Interest) would be approximately $1,497. Your total monthly cash outflow (Expenses + Mortgage) would be around $2,097. This leaves you with a Net Monthly Cash Flow of $703, resulting in a healthy Cash on Cash ROI of roughly 10.5% (assuming closing costs).
How to Improve Your ROI
If the calculator shows a negative cash flow or low ROI, consider these adjustments:
Negotiate Price: Lowering the purchase price reduces your loan amount and monthly payments.
Increase Rent: Can you add value with minor renovations to command higher rent?
Reduce Expenses: Shop around for cheaper insurance or self-manage the property to save on management fees.
Larger Down Payment: Putting more money down reduces the mortgage payment, instantly increasing monthly cash flow (though it may lower your specific Cash on Cash percentage).