Analyze the profitability, Cap Rate, and Cash-on-Cash return of your real estate investment.
Acquisition & Loan Details
Rental Income
Operating Expenses
Investment Analysis
Monthly Principal & Interest:—
Total Monthly Expenses:—
Net Operating Income (Monthly):—
Monthly Cash Flow:—
Returns
Cap Rate:—
Cash on Cash Return:—
Initial Cash Invested:—
Understanding Rental Property Cash Flow Analysis
Successful real estate investing relies less on speculation and more on math. The Rental Property Cash Flow Calculator above is designed to give you a clear picture of whether a property is an asset that puts money in your pocket or a liability that takes it out.
Key Metrics Explained
1. Net Operating Income (NOI)
NOI is the total income the property generates minus all operating expenses (taxes, insurance, maintenance, vacancy, management) but excluding mortgage payments. It is a raw measure of the property's efficiency.
2. Cash Flow
This is the money left over after all bills are paid, including the mortgage. Positive cash flow ensures you can hold the property long-term without draining your personal savings.
Formula: Rental Income – (Operating Expenses + Mortgage Payment)
3. Cap Rate (Capitalization Rate)
Cap Rate measures the return on investment based on the property's value, assuming you bought it with cash. It is useful for comparing different properties regardless of how they are financed. A higher Cap Rate generally indicates higher risk or higher return potential.
4. Cash on Cash Return (CoC)
This is arguably the most important metric for leveraged investors. It measures the annual cash flow relative to the actual cash you put into the deal (Down Payment + Closing Costs). It tells you how hard your specific dollars are working for you.
Common Expenses Investors Forget
Vacancy Rate: Properties are rarely occupied 100% of the time. We recommend factoring in at least 5-8% for vacancy turnover.
Maintenance & Repairs: Even if a house is new, things break. Setting aside 5-10% of monthly rent ensures you aren't caught off guard by a broken water heater or roof leak.
Property Management: Even if you plan to self-manage, it's wise to calculate the numbers with a 10% management fee. This ensures the deal still works if you decide to hire a manager later.
The 1% Rule
A quick "rule of thumb" used by investors is the 1% rule, which suggests that the monthly rent should be at least 1% of the purchase price. While not a strict law, properties meeting this threshold are more likely to generate positive cash flow.
function calculateRental() {
// 1. Get Input Values
var price = parseFloat(document.getElementById("purchasePrice").value) || 0;
var downPerc = parseFloat(document.getElementById("downPaymentPerc").value) || 0;
var intRate = parseFloat(document.getElementById("interestRate").value) || 0;
var termYears = parseFloat(document.getElementById("loanTerm").value) || 0;
var rent = parseFloat(document.getElementById("monthlyRent").value) || 0;
var vacancyPerc = parseFloat(document.getElementById("vacancyRate").value) || 0;
var taxYear = parseFloat(document.getElementById("propertyTax").value) || 0;
var insYear = parseFloat(document.getElementById("insurance").value) || 0;
var hoaMonth = parseFloat(document.getElementById("hoaFee").value) || 0;
var maintPerc = parseFloat(document.getElementById("maintenancePerc").value) || 0;
var mgmtPerc = parseFloat(document.getElementById("managementPerc").value) || 0;
// 2. Calculate Mortgage (Principal & Interest)
var downPaymentAmount = price * (downPerc / 100);
var loanAmount = price – downPaymentAmount;
var monthlyRate = (intRate / 100) / 12;
var totalPayments = termYears * 12;
var monthlyPI = 0;
if (intRate > 0) {
monthlyPI = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
} else {
monthlyPI = loanAmount / totalPayments;
}
// 3. Calculate Operating Expenses
var vacancyCost = rent * (vacancyPerc / 100);
var maintCost = rent * (maintPerc / 100);
var mgmtCost = rent * (mgmtPerc / 100);
// Convert annual costs to monthly
var taxMonth = taxYear / 12;
var insMonth = insYear / 12;
var totalOperatingExpenses = taxMonth + insMonth + hoaMonth + vacancyCost + maintCost + mgmtCost;
var totalExpenses = totalOperatingExpenses + monthlyPI;
// 4. Calculate Cash Flow
var monthlyCashFlow = rent – totalExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// 5. Calculate Metrics
var monthlyNOI = rent – totalOperatingExpenses;
var annualNOI = monthlyNOI * 12;
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
var cashOnCash = 0;
if (downPaymentAmount > 0) {
cashOnCash = (annualCashFlow / downPaymentAmount) * 100;
}
// 6. Formatting Helper
function formatCurrency(num) {
return "$" + num.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
}
function formatPercent(num) {
return num.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "%";
}
// 7. Output Results
document.getElementById("resMortgage").innerText = formatCurrency(monthlyPI);
document.getElementById("resTotalExp").innerText = formatCurrency(totalExpenses);
document.getElementById("resNOI").innerText = formatCurrency(monthlyNOI);
var cashFlowEl = document.getElementById("resCashFlow");
cashFlowEl.innerText = formatCurrency(monthlyCashFlow);
if (monthlyCashFlow >= 0) {
cashFlowEl.className = "cal-result-value cal-highlight";
} else {
cashFlowEl.className = "cal-result-value cal-highlight-neg";
}
document.getElementById("resCapRate").innerText = formatPercent(capRate);
document.getElementById("resCOC").innerText = formatPercent(cashOnCash);
document.getElementById("resCashInvested").innerText = formatCurrency(downPaymentAmount);
// Show result container
document.getElementById("resultContainer").style.display = "block";
}