Analyze your real estate investment deal instantly.
Purchase Info
30 Years
15 Years
10 Years
Income & Expenses
Investment Analysis
Monthly Cash Flow
Annual Cash Flow
Net Operating Income (NOI)
Total Cash Needed to Close
Return Metrics
Cash on Cash Return
Cap Rate
Monthly Mortgage Payment (P&I)
Total Monthly Expenses
function calculateRentalProperty() {
// Get Inputs
var price = parseFloat(document.getElementById('rpPrice').value) || 0;
var downPercent = parseFloat(document.getElementById('rpDownPercent').value) || 0;
var interest = parseFloat(document.getElementById('rpInterest').value) || 0;
var termYears = parseFloat(document.getElementById('rpTerm').value) || 30;
var closingCosts = parseFloat(document.getElementById('rpClosingCosts').value) || 0;
var monthlyRent = parseFloat(document.getElementById('rpRent').value) || 0;
var annualTax = parseFloat(document.getElementById('rpTax').value) || 0;
var annualInsurance = parseFloat(document.getElementById('rpInsurance').value) || 0;
var monthlyHOA = parseFloat(document.getElementById('rpHoa').value) || 0;
var vacancyRate = parseFloat(document.getElementById('rpVacancy').value) || 0;
// Mortgage Calculation
var downPayment = price * (downPercent / 100);
var loanAmount = price – downPayment;
var monthlyInterestRate = (interest / 100) / 12;
var numberOfPayments = termYears * 12;
var monthlyMortgage = 0;
if (interest > 0) {
monthlyMortgage = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
monthlyMortgage = loanAmount / numberOfPayments;
}
// Expense Calculation
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
var monthlyVacancyCost = monthlyRent * (vacancyRate / 100);
var totalMonthlyExpenses = monthlyMortgage + monthlyTax + monthlyInsurance + monthlyHOA + monthlyVacancyCost;
var annualOperatingExpenses = (monthlyTax + monthlyInsurance + monthlyHOA + monthlyVacancyCost) * 12; // Excludes Mortgage for NOI
// Income Analysis
var monthlyCashFlow = monthlyRent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
var annualNOI = (monthlyRent * 12) – annualOperatingExpenses;
// Returns
var totalCashInvested = downPayment + closingCosts;
var cashOnCash = 0;
if (totalCashInvested > 0) {
cashOnCash = (annualCashFlow / totalCashInvested) * 100;
}
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
// Display Results
var formatter = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
var percentFormatter = new Intl.NumberFormat('en-US', { style: 'percent', minimumFractionDigits: 2, maximumFractionDigits: 2 });
document.getElementById('resMonthlyFlow').innerHTML = formatter.format(monthlyCashFlow);
document.getElementById('resAnnualFlow').innerHTML = formatter.format(annualCashFlow);
document.getElementById('resNOI').innerHTML = formatter.format(annualNOI);
document.getElementById('resCashToClose').innerHTML = formatter.format(totalCashInvested);
document.getElementById('resCoC').innerHTML = percentFormatter.format(cashOnCash / 100);
document.getElementById('resCapRate').innerHTML = percentFormatter.format(capRate / 100);
document.getElementById('resMortgage').innerHTML = formatter.format(monthlyMortgage);
document.getElementById('resTotalExp').innerHTML = formatter.format(totalMonthlyExpenses);
// Styling based on positive/negative flow
var flowElement = document.getElementById('resMonthlyFlow');
if (monthlyCashFlow >= 0) {
flowElement.className = "rp-result-value rp-highlight";
} else {
flowElement.className = "rp-result-value rp-highlight-bad";
}
// Show Results Div
document.getElementById('rpResults').style.display = "block";
}
Understanding Rental Property Cash Flow Analysis
Investing in real estate is one of the most reliable ways to build long-term wealth, but success hinges on the numbers. Unlike stocks, where speculation often drives value, rental property investing is fundamentally a business of mathematics. The core metric that determines the viability of a rental investment is Cash Flow.
What is Rental Cash Flow?
Cash flow is the net profit a rental property generates after all expenses are paid. It is calculated by taking your total income (primarily rent) and subtracting all operating expenses and debt service (mortgage payments).
Positive Cash Flow means the property puts money into your pocket every month. Negative Cash Flow means you must contribute money from other sources to keep the property running. For most buy-and-hold investors, achieving positive cash flow is the primary goal.
Key Metrics Calculated
This calculator provides several critical metrics to help you evaluate a deal:
Net Operating Income (NOI): This is your annual income minus operating expenses (taxes, insurance, maintenance, vacancy) before mortgage payments. It represents the profitability of the asset itself, independent of financing.
Cash on Cash Return (CoC): This is arguably the most important metric for investors. It measures the annual cash flow relative to the actual cash you invested (down payment + closing costs). It answers the question: "What is the return on the actual dollars I put into this deal?"
Cap Rate (Capitalization Rate): Calculated as NOI divided by the purchase price. Cap rate allows you to compare the profitability of different properties assuming they were bought with all cash. It helps gauge the market risk and potential return.
The 1% Rule
A common "rule of thumb" in real estate is the 1% Rule. It states that for a property to potentially cash flow, the monthly rent should be at least 1% of the purchase price. For example, a $200,000 house should rent for at least $2,000/month. While not a hard law, it serves as a quick filter to screen properties before running a detailed analysis using the calculator above.
Estimating Expenses
New investors often overestimate cash flow by underestimating expenses. Be sure to account for:
Vacancy: Properties will not be occupied 365 days a year. A 5-8% vacancy rate is a standard conservative estimate.
CapEx (Capital Expenditures): Big-ticket items like roofs, HVAC systems, and water heaters will eventually break. Setting aside reserves monthly is crucial.
Property Management: Even if you self-manage, it is wise to factor in 8-10% for management to ensure the deal works if you ever decide to hire a professional.
Conclusion
Use this Rental Property Cash Flow Calculator to run scenarios on potential deals. Adjust the purchase price, down payment, and rental income to see how sensitive your returns are to market changes. Remember, a good investor buys based on current numbers, not speculation on future appreciation.