How to Calculate My Hourly Rate from My Annual Salary
by
Rental Property Cash Flow Calculator
.rp-calc-wrapper {
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{
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"@type": "Question",
"name": "What is a good Cash on Cash return for a rental property?",
"acceptedAnswer": {
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"text": "Generally, a Cash on Cash (CoC) return of 8-12% is considered good in most real estate markets. However, some investors target 15% or higher for riskier assets or cheaper markets, while others accept 4-6% in high-appreciation areas."
}
}, {
"@type": "Question",
"name": "How do you calculate monthly cash flow?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Monthly cash flow is calculated by subtracting your total monthly expenses (mortgage, taxes, insurance, vacancy, maintenance, HOA) from your total monthly rental income."
}
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"@type": "Question",
"name": "Why should I include a vacancy rate?",
"acceptedAnswer": {
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"text": "No property is occupied 100% of the time. Including a vacancy rate (typically 5-8%) accounts for turnover periods between tenants, ensuring your financial projections are realistic and you have reserves for months without rent."
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Purchase Information
Income & Expenses
Monthly Breakdown
Monthly Mortgage (P&I):$0.00
Property Tax (Monthly):$0.00
Insurance (Monthly):$0.00
Vacancy Reserve:$0.00
HOA & Maintenance:$0.00
Total Monthly Expenses:$0.00
Monthly Cash Flow
$0.00
Annual Cash Flow: $0.00
Cash on Cash Return: 0.00%
Understanding Rental Property Cash Flow
Investing in real estate is one of the most powerful ways to build long-term wealth, but not every property is a good deal. The cornerstone of a successful rental investment is Positive Cash Flow. This Rental Property Calculator helps you determine if a potential investment will put money in your pocket every month or become a financial drain.
What is Cash Flow?
Cash flow is the net income from a real estate investment after mortgage payments and operating expenses have been made. A key mistake new investors make is assuming that Rent – Mortgage = Profit. In reality, you must account for "hidden" costs like vacancy reserves, repairs, property taxes, and insurance.
How the Calculations Work
This tool uses a comprehensive formula to give you a realistic view of your investment potential:
Principal & Interest (P&I): This is your base loan payment calculated based on your interest rate and loan term.
Operating Expenses: This includes recurring costs like HOA fees, property taxes (prorated monthly), and insurance premiums.
Reserves: We calculate a vacancy rate (default 5%) and a maintenance budget to ensure you have funds set aside for turnover and repairs.
Analyzing Cash on Cash Return (CoC)
While monthly cash flow is important, Cash on Cash Return tells you how hard your money is working. It is calculated by dividing your Annual Cash Flow by the Total Cash Invested (Down Payment + Closing Costs).
For example, if you invest $50,000 cash to buy a property and it generates $5,000 in net profit per year, your CoC return is 10%. This metric allows you to compare real estate against other investment vehicles like the stock market.
What is a Good ROI?
While every investor has different goals, a general rule of thumb for buy-and-hold rentals is:
8-12%: Good return, typical for stable markets.
15%+: Excellent return, often found in lower-cost markets or fixer-uppers (BRRRR strategy).
Below 5%: Often indicates a property is in a high-appreciation area where you are betting on future value rather than immediate income.
Tips for Improving Cash Flow
If the calculator shows a negative or low cash flow, consider these adjustments:
Increase the Down Payment: This lowers your loan amount and monthly mortgage payment.
Negotiate the Price: Buying below market value is the fastest way to increase ROI.
Value-Add: Can you renovate to increase the monthly rent?
function calculateRentalCashFlow() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('rpPrice').value) || 0;
var downPercent = parseFloat(document.getElementById('rpDownPercent').value) || 0;
var interestRate = parseFloat(document.getElementById('rpRate').value) || 0;
var termYears = parseFloat(document.getElementById('rpTerm').value) || 0;
var rent = 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 monthlyMaintenance = parseFloat(document.getElementById('rpMaintenance').value) || 0;
var vacancyRate = parseFloat(document.getElementById('rpVacancy').value) || 0;
// 2. Calculate Mortgage (P&I)
var downPayment = price * (downPercent / 100);
var loanAmount = price – downPayment;
var monthlyRate = (interestRate / 100) / 12;
var totalPayments = termYears * 12;
var monthlyMortgage = 0;
if (interestRate > 0) {
monthlyMortgage = (loanAmount * monthlyRate) / (1 – Math.pow(1 + monthlyRate, -totalPayments));
} else {
monthlyMortgage = loanAmount / totalPayments;
}
// 3. Calculate Monthly Expenses
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
var vacancyCost = rent * (vacancyRate / 100);
var totalExpenses = monthlyMortgage + monthlyTax + monthlyInsurance + monthlyHOA + monthlyMaintenance + vacancyCost;
// 4. Calculate Cash Flow
var monthlyCashFlow = rent – totalExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// 5. Calculate Cash on Cash Return
// Estimating closing costs at 3% of purchase price for realistic total cash invested
var closingCosts = price * 0.03;
var totalCashInvested = downPayment + closingCosts;
var cocReturn = 0;
if (totalCashInvested > 0) {
cocReturn = (annualCashFlow / totalCashInvested) * 100;
}
// 6. Display Results
var formatCurrency = function(num) {
return "$" + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
};
document.getElementById('resMortgage').innerText = formatCurrency(monthlyMortgage);
document.getElementById('resTax').innerText = formatCurrency(monthlyTax);
document.getElementById('resInsurance').innerText = formatCurrency(monthlyInsurance);
document.getElementById('resVacancy').innerText = formatCurrency(vacancyCost);
document.getElementById('resOps').innerText = formatCurrency(monthlyHOA + monthlyMaintenance);
document.getElementById('resTotalExpenses').innerText = formatCurrency(totalExpenses);
var cfElement = document.getElementById('resCashFlow');
cfElement.innerText = formatCurrency(monthlyCashFlow);
if (monthlyCashFlow >= 0) {
cfElement.className = "rp-result-value rp-positive";
} else {
cfElement.className = "rp-result-value rp-negative";
}
var annualElement = document.getElementById('resAnnualFlow');
annualElement.innerText = formatCurrency(annualCashFlow);
if (annualCashFlow >= 0) {
annualElement.style.color = "#28a745";
} else {
annualElement.style.color = "#dc3545";
}
var cocElement = document.getElementById('resCOC');
cocElement.innerText = cocReturn.toFixed(2) + "%";
if (cocReturn >= 0) {
cocElement.style.color = "#28a745";
} else {
cocElement.style.color = "#dc3545";
}
document.getElementById('rpResultBox').style.display = 'block';
}