Estimate your monthly profit and Cap Rate instantly.
Gross Monthly Income:
Operating Expenses (Monthly):
Net Operating Income (NOI) / Month:
Monthly Cash Flow:
Annual Cash Flow:
Cap Rate:
How to Analyze a Rental Property Investment
Successful real estate investing relies on accurate math, not just intuition. This Rental Property Cash Flow Calculator helps investors determine the viability of a potential purchase by breaking down income, operating expenses, and debt service.
Understanding the Key Metrics
1. Cash Flow
Cash Flow is the net amount of money moving in or out of your business (or property) monthly. In rental real estate, it is calculated as:
Formula: Total Rental Income – (Operating Expenses + Debt Service) = Cash Flow
Positive cash flow means the property pays for itself and generates profit. Negative cash flow implies you must contribute money monthly to keep the property, which increases risk.
2. Net Operating Income (NOI)
NOI represents the profitability of the property before accounting for the mortgage. It is crucial for calculating the Cap Rate. It includes income minus expenses like taxes, insurance, HOA, and maintenance, but excludes mortgage principal and interest payments.
3. Cap Rate (Capitalization Rate)
The Cap Rate is a metric used to compare different real estate investments purely on their ability to generate income, regardless of financing. A higher Cap Rate generally indicates a higher return, but often comes with higher risk (e.g., properties in less desirable neighborhoods).
Critical Inputs for Accurate Calculation
Vacancy Rate: No property is occupied 100% of the time. A standard conservative estimate is 5% to 8%, representing roughly 2-4 weeks of vacancy per year.
Maintenance Reserve: Furnaces break and roofs leak. Setting aside 5% to 10% of monthly rent ensures you have funds ready for repairs without killing your cash flow.
HOA Fees: If buying a condo or in a managed community, Homeowners Association fees can significantly eat into profits. Always verify these before calculating.
What is a "Good" Cash Flow?
While "good" is subjective, many investors aim for $100 to $200 per door, per month in positive cash flow for single-family homes after all expenses and reserves. In high-cost of living areas, cash flow might be lower, but investors often bank on long-term appreciation instead.
function calculateROI() {
// Inputs
var price = parseFloat(document.getElementById('propPrice').value) || 0;
var rent = parseFloat(document.getElementById('rentAmount').value) || 0;
var mortgage = parseFloat(document.getElementById('mortgagePayment').value) || 0;
var annualTaxes = parseFloat(document.getElementById('annualTaxes').value) || 0;
var annualInsurance = parseFloat(document.getElementById('annualInsurance').value) || 0;
var hoa = parseFloat(document.getElementById('monthlyHOA').value) || 0;
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value) || 0;
var maintRate = parseFloat(document.getElementById('maintRate').value) || 0;
// Validation
if (price <= 0 && rent 0) {
capRate = (annualNOI / price) * 100;
}
// Formatting Helpers
var currencyFormat = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 0,
maximumFractionDigits: 0,
});
// Display Results
document.getElementById('displayGross').innerText = currencyFormat.format(rent);
document.getElementById('displayExpenses').innerText = currencyFormat.format(totalOperatingExpenses);
document.getElementById('displayNOI').innerText = currencyFormat.format(noi);
document.getElementById('displayCashFlow').innerText = currencyFormat.format(monthlyCashFlow);
document.getElementById('displayAnnualCashFlow').innerText = currencyFormat.format(annualCashFlow);
document.getElementById('displayCapRate').innerText = capRate.toFixed(2) + "%";
// Styling logic for negative cash flow
var cashFlowElement = document.getElementById('displayCashFlow');
if (monthlyCashFlow < 0) {
cashFlowElement.style.color = "#c0392b"; // Red
} else {
cashFlowElement.style.color = "#27ae60"; // Green
}
// Show Results Area
document.getElementById('results-area').style.display = 'block';
}