Rental Property Cash on Cash Return Calculator
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Rental Property Cash on Cash Return Calculator
Analysis Results
Cash on Cash Return (CoC)
0.00%
Net Operating Income (Annual)
$0.00
Total Cash Needed to Close
$0.00
Monthly Mortgage Payment (P&I)
$0.00
Understanding Rental Property ROI
Investing in real estate is one of the most reliable ways to build wealth, but analyzing a deal correctly is critical to success. This Rental Property Cash on Cash Return Calculator helps real estate investors evaluate the profitability of a potential rental property by breaking down the expenses, mortgage obligations, and projected income.
What is Cash on Cash Return?
Cash on Cash (CoC) Return is a metric used to calculate the cash income earned on the cash invested in a property. Unlike ROI, which might account for loan paydown or appreciation, CoC strictly looks at the liquid cash flow relative to the actual dollars you put into the deal (Down Payment + Closing Costs + Rehab Costs). A healthy Cash on Cash return varies by market, but many investors look for 8-12% or higher.
Key Metrics Explained
- Net Operating Income (NOI): This is your total revenue minus all operating expenses (taxes, insurance, maintenance, vacancy, HOA). Note that NOI does not include mortgage payments. It measures the profitability of the asset itself, regardless of financing.
- Cap Rate: Calculated as
NOI / Purchase Price. This helps compare the value of different properties irrespective of how they are financed. A higher cap rate generally implies higher risk or higher potential return.
- Monthly Cash Flow: The net amount of money entering your pocket every month after the mortgage and all expenses are paid. Positive cash flow is essential for long-term sustainability.
How to Use This Calculator
To get an accurate analysis, you need to input realistic numbers. Here is a guide to the input fields:
- Purchase Price & Loan Details: Enter the negotiated price of the home. The down payment percent and interest rate will determine your monthly mortgage payment (Principal & Interest).
- Closing Costs: Don't forget to include title fees, recording fees, and loan origination fees. This increases your initial cash investment.
- Operating Expenses: Be conservative. Always estimate for Maintenance (usually 5-10% of rent) and Vacancy (usually 5-8% to account for turnover), even if the property is currently occupied.
Frequently Asked Questions
Does this calculator include appreciation?
No, this calculator focuses on cash flow analysis. Appreciation is speculative and "phantom" income until you sell. Prudent investors buy for cash flow and treat appreciation as a bonus.
What is a good Cash on Cash return?
While this is subjective, passive investors often aim for 8-10%, while active investors might seek 15%+. In high-appreciation markets, investors might accept lower cash returns (4-5%) in exchange for equity growth.
function calculateROI() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('purchasePrice').value);
var downPct = parseFloat(document.getElementById('downPaymentPct').value);
var closingCosts = parseFloat(document.getElementById('closingCosts').value);
var rate = parseFloat(document.getElementById('interestRate').value);
var term = parseFloat(document.getElementById('loanTerm').value);
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value);
var tax = parseFloat(document.getElementById('propertyTax').value);
var insurance = parseFloat(document.getElementById('insurance').value);
var hoa = parseFloat(document.getElementById('hoa').value);
var maint = parseFloat(document.getElementById('maintenance').value);
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value);
// Validation to prevent NaN errors
if (isNaN(price) || isNaN(downPct) || isNaN(rate) || isNaN(monthlyRent)) {
alert("Please enter valid numbers for Price, Down Payment, Rate, and Rent.");
return;
}
// 2. Calculate Mortgage (P&I)
var downPaymentAmt = price * (downPct / 100);
var loanAmount = price – downPaymentAmt;
var monthlyRate = rate / 100 / 12;
var numPayments = term * 12;
var monthlyMortgage = 0;
if (rate > 0) {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
} else {
monthlyMortgage = loanAmount / numPayments;
}
// 3. Calculate Expenses
var vacancyCost = monthlyRent * (vacancyRate / 100);
var totalOperatingExpenses = tax + insurance + hoa + maint + vacancyCost; // Excluding mortgage
var totalMonthlyExpenses = totalOperatingExpenses + monthlyMortgage;
// 4. Calculate Key Metrics
// NOI (Annual)
var annualNOI = (monthlyRent – totalOperatingExpenses) * 12;
// Cash Flow
var monthlyCashFlow = monthlyRent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// Total Cash Invested
var totalCashInvested = downPaymentAmt + closingCosts;
// Cash on Cash Return
var cocReturn = 0;
if (totalCashInvested > 0) {
cocReturn = (annualCashFlow / totalCashInvested) * 100;
}
// Cap Rate
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
// 5. Update UI
// Helper function for currency formatting
var fmtMoney = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
document.getElementById('cocResult').innerText = cocReturn.toFixed(2) + "%";
document.getElementById('cashFlowResult').innerText = fmtMoney.format(monthlyCashFlow);
document.getElementById('capRateResult').innerText = capRate.toFixed(2) + "%";
document.getElementById('noiResult').innerText = fmtMoney.format(annualNOI);
document.getElementById('cashToCloseResult').innerText = fmtMoney.format(totalCashInvested);
document.getElementById('mortgageResult').innerText = fmtMoney.format(monthlyMortgage);
// Add color styling for positive/negative cash flow
var cashFlowEl = document.getElementById('cashFlowResult');
if (monthlyCashFlow >= 0) {
cashFlowEl.classList.remove('negative');
cashFlowEl.classList.add('positive');
} else {
cashFlowEl.classList.remove('positive');
cashFlowEl.classList.add('negative');
}
}
// Run calculation on load to show default values
window.onload = calculateROI;