Investing in real estate is a numbers game. Before purchasing a rental property, it is critical to determine if the asset will produce a positive cash flow. This Rental Property Cash Flow Calculator helps investors analyze potential deals by accounting for all income and operating expenses.
What is Cash Flow?
Cash flow is the net amount of cash moving into or out of an investment. In real estate, positive cash flow means your rental income exceeds your mortgage payments and operating expenses (taxes, insurance, maintenance). Negative cash flow implies the property costs you money to hold every month.
Key Metrics Calculated
Net Operating Income (NOI): This is your total income minus operating expenses, excluding mortgage payments. It measures the profitability of the property itself.
Cash on Cash Return (CoC): This metric measures the annual return on the actual cash you invested (down payment + closing costs + repairs). A CoC return of 8-12% is often considered a solid benchmark for rental investors.
Cap Rate (Capitalization Rate): Calculated as NOI divided by the property's purchase price. This helps compare the profitability of different properties regardless of how they are financed.
How to Use This Calculator
To get the most accurate results, ensure you input realistic numbers for expenses. Don't forget to account for "hidden" costs like vacancy (periods where the property is empty) and maintenance reserves (saving for a new roof or HVAC repairs).
Common Expense Estimations
Vacancy Rate: typically 5-8% depending on the local market.
Maintenance & CapEx: 5-10% of monthly rent is a safe buffer for repairs.
Property Management: If you hire a professional manager, expect to pay 8-10% of the monthly rent.
function calculateCashFlow() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('purchasePrice').value) || 0;
var downPercent = parseFloat(document.getElementById('downPaymentPercent').value) || 0;
var closingCosts = parseFloat(document.getElementById('closingCosts').value) || 0;
var rehabCosts = parseFloat(document.getElementById('rehabCosts').value) || 0;
var interestRate = parseFloat(document.getElementById('interestRate').value) || 0;
var loanTermYears = parseFloat(document.getElementById('loanTerm').value) || 0;
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var annualTax = parseFloat(document.getElementById('propertyTax').value) || 0;
var annualInsurance = parseFloat(document.getElementById('insurance').value) || 0;
var monthlyHOA = parseFloat(document.getElementById('hoa').value) || 0;
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value) || 0;
var maintenanceRate = parseFloat(document.getElementById('maintenanceRate').value) || 0;
var managementRate = parseFloat(document.getElementById('managementFee').value) || 0;
// 2. Calculate Initial Investment
var downPaymentAmount = price * (downPercent / 100);
var loanAmount = price – downPaymentAmount;
var totalCashInvested = downPaymentAmount + closingCosts + rehabCosts;
// 3. Calculate Mortgage Payment (Principal & Interest)
// Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var monthlyRate = (interestRate / 100) / 12;
var totalPayments = loanTermYears * 12;
var mortgagePayment = 0;
if (interestRate > 0) {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
} else {
mortgagePayment = loanAmount / totalPayments;
}
if (isNaN(mortgagePayment)) mortgagePayment = 0;
// 4. Calculate Operating Expenses
// Variable expenses based on rent
var vacancyCost = monthlyRent * (vacancyRate / 100);
var maintenanceCost = monthlyRent * (maintenanceRate / 100);
var managementCost = monthlyRent * (managementRate / 100);
// Fixed monthly expenses
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
var totalOperatingExpenses = monthlyTax + monthlyInsurance + monthlyHOA + vacancyCost + maintenanceCost + managementCost;
var totalMonthlyExpensesWithMortgage = totalOperatingExpenses + mortgagePayment;
// 5. Calculate Income Metrics
var grossOperatingIncome = monthlyRent – vacancyCost; // Effective Gross Income
var monthlyNOI = grossOperatingIncome – (totalOperatingExpenses – vacancyCost);
// Note: NOI usually includes Vacancy loss as a deduction from Gross Potential Rent.
// Standard NOI = (Rent – Vacancy) – (Tax + Ins + Maint + Mgmt + HOA).
// My vars: totalOperatingExpenses includes Vacancy cost.
// So NOI = MonthlyRent – TotalOperatingExpenses (where TotalOps includes vacancy cost).
// Correction for NOI standard definition:
// NOI does not include Debt Service (Mortgage).
var calculatedNOI = monthlyRent – totalOperatingExpenses;
var monthlyCashFlow = calculatedNOI – mortgagePayment;
var annualCashFlow = monthlyCashFlow * 12;
var annualNOI = calculatedNOI * 12;
// 6. Calculate Returns
var cocReturn = 0;
if (totalCashInvested > 0) {
cocReturn = (annualCashFlow / totalCashInvested) * 100;
}
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
// 7. Display Results
document.getElementById('results-area').style.display = 'block';
// Format Currency Helper
function fmtMoney(num) {
return '$' + num.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
}
function fmtPercent(num) {
return num.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2}) + '%';
}
document.getElementById('res-totalInvestment').innerText = fmtMoney(totalCashInvested);
document.getElementById('res-mortgage').innerText = fmtMoney(mortgagePayment);
document.getElementById('res-expenses').innerText = fmtMoney(totalMonthlyExpensesWithMortgage); // This is total outflow
document.getElementById('res-noi').innerText = fmtMoney(calculatedNOI);
document.getElementById('res-cashflow').innerText = fmtMoney(monthlyCashFlow);
document.getElementById('res-coc').innerText = fmtPercent(cocReturn);
document.getElementById('res-caprate').innerText = fmtPercent(capRate);
// Color coding for cash flow
var cfElement = document.getElementById('res-cashflow');
if (monthlyCashFlow < 0) {
cfElement.classList.add('negative');
} else {
cfElement.classList.remove('negative');
}
}