.calc-row {
display: flex;
flex-wrap: wrap;
margin: 0 -10px;
}
.calc-col {
flex: 1;
min-width: 300px;
padding: 0 10px;
margin-bottom: 20px;
}
.calc-input-group {
margin-bottom: 15px;
}
.calc-input-group label {
display: block;
margin-bottom: 5px;
font-weight: 600;
color: #333;
font-size: 14px;
}
.calc-input-group input, .calc-input-group select {
width: 100%;
padding: 10px;
border: 1px solid #ddd;
border-radius: 4px;
font-size: 16px;
box-sizing: border-box;
}
.calc-input-group input:focus {
border-color: #0073aa;
outline: none;
box-shadow: 0 0 0 2px rgba(0,115,170,0.2);
}
.calc-btn {
background-color: #0073aa;
color: white;
border: none;
padding: 12px 25px;
font-size: 18px;
font-weight: bold;
border-radius: 4px;
cursor: pointer;
width: 100%;
transition: background-color 0.3s;
}
.calc-btn:hover {
background-color: #005177;
}
.calc-results-box {
background-color: #f7f9fc;
padding: 20px;
border-radius: 6px;
border-left: 5px solid #0073aa;
margin-top: 20px;
display: none;
}
.result-item {
display: flex;
justify-content: space-between;
margin-bottom: 10px;
padding-bottom: 10px;
border-bottom: 1px solid #e0e0e0;
}
.result-item:last-child {
border-bottom: none;
margin-bottom: 0;
padding-bottom: 0;
}
.result-label {
color: #555;
font-weight: 500;
}
.result-value {
font-weight: 700;
color: #222;
}
.result-highlight {
font-size: 1.2em;
color: #0073aa;
}
.error-msg {
color: #d63638;
font-size: 14px;
margin-top: 10px;
display: none;
}
.article-content {
margin-top: 40px;
line-height: 1.6;
color: #333;
}
.article-content h2 {
font-size: 24px;
margin-top: 30px;
color: #2c3e50;
border-bottom: 2px solid #eee;
padding-bottom: 10px;
}
.article-content h3 {
font-size: 20px;
margin-top: 25px;
color: #34495e;
}
.article-content p {
margin-bottom: 15px;
}
.article-content ul {
margin-bottom: 20px;
padding-left: 20px;
}
.article-content li {
margin-bottom: 8px;
}
@media (max-width: 600px) {
.calc-col {
min-width: 100%;
}
}
How to Analyze a Rental Property Investment
Investing in real estate is one of the most reliable ways to build wealth, but simply buying a property doesn't guarantee a profit. To succeed, investors must perform a thorough financial analysis. This Rental Property Calculator helps you evaluate the potential profitability of a real estate investment by analyzing Cash Flow, Net Operating Income (NOI), and Cash on Cash Return on Investment (ROI).
Understanding the Key Metrics
When analyzing a rental property deal, there are three primary metrics you should focus on:
1. Monthly Cash Flow
Cash flow is the profit you take home each month after all operating expenses and debt service (mortgage payments) are paid. Positive cash flow ensures the property pays for itself and provides you with passive income.
Formula: Monthly Rent – (Mortgage + Taxes + Insurance + HOA + Maintenance/Vacancy)
2. Cash on Cash ROI
This metric measures the annual return on the actual cash you invested (Down Payment + Closing Costs). It is arguably the most important metric for leveraged real estate investments because it tells you how hard your specific dollars are working.
Formula: (Annual Cash Flow / Total Cash Invested) × 100
3. Cap Rate (Capitalization Rate)
Cap Rate measures the property's natural rate of return assuming you paid all cash (no mortgage). It helps you compare the profitability of different properties regardless of financing.
Formula: Net Operating Income / Purchase Price
Example Calculation Scenario
Let's look at a realistic example of how the numbers work using our rental property calculator:
- Purchase Price: $250,000
- Down Payment: 20% ($50,000)
- Closing Costs: $5,000
- Loan: 30-year fixed at 6.5% interest
- Monthly Rent: $2,200
Expenses: Property taxes ($3,000/yr), Insurance ($1,200/yr), and a 10% allocation for maintenance and vacancy ($220/mo).
The Results: The monthly mortgage payment would be roughly $1,264. Adding taxes ($250/mo), insurance ($100/mo), and the maintenance fund ($220/mo), total expenses are about $1,834.
Cash Flow: $2,200 (Rent) – $1,834 (Expenses) = $366/month.
ROI: ($366 × 12) / $55,000 Total Cash = ~8.0% Cash on Cash Return.
Why Operating Expenses Matter
Many new investors make the mistake of only subtracting the mortgage payment from the rent. This is a dangerous calculation known as "phantom cash flow." You must account for:
- Vacancy: Properties don't stay rented 365 days a year forever.
- CapEx (Capital Expenditures): Roofs, HVAC systems, and water heaters eventually need replacement.
- Management: Even if you self-manage, your time has value, or you may need a property manager later.
Using a comprehensive rental property calculator ensures you account for these hidden costs before you sign the closing papers.
function calculateRentalROI() {
// 1. Get Input Values
var price = parseFloat(document.getElementById("purchasePrice").value);
var downPaymentPercent = parseFloat(document.getElementById("downPaymentPercent").value);
var closingCosts = parseFloat(document.getElementById("closingCosts").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTerm").value);
var monthlyRent = parseFloat(document.getElementById("monthlyRent").value);
var annualTax = parseFloat(document.getElementById("annualTax").value);
var annualInsurance = parseFloat(document.getElementById("annualInsurance").value);
var monthlyHOA = parseFloat(document.getElementById("monthlyHOA").value);
var expenseRatio = parseFloat(document.getElementById("expenseRatio").value);
var errorDiv = document.getElementById("calc-error");
var resultsDiv = document.getElementById("calc-results");
// 2. Validation
if (isNaN(price) || isNaN(downPaymentPercent) || isNaN(interestRate) ||
isNaN(monthlyRent) || isNaN(annualTax) || isNaN(annualInsurance)) {
errorDiv.style.display = "block";
resultsDiv.style.display = "none";
return;
} else {
errorDiv.style.display = "none";
resultsDiv.style.display = "block";
}
// 3. Financial Calculations
// Loan Calculation
var downPaymentAmount = price * (downPaymentPercent / 100);
var loanAmount = price – downPaymentAmount;
var monthlyInterest = (interestRate / 100) / 12;
var numberOfPayments = loanTermYears * 12;
// Monthly Mortgage P&I Formula: P * [r(1+r)^n] / [(1+r)^n – 1]
var monthlyMortgage = 0;
if (interestRate > 0) {
var mathPow = Math.pow(1 + monthlyInterest, numberOfPayments);
monthlyMortgage = loanAmount * (monthlyInterest * mathPow) / (mathPow – 1);
} else {
monthlyMortgage = loanAmount / numberOfPayments;
}
// Monthly Expense Calculation
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
var monthlyVariableExpenses = monthlyRent * (expenseRatio / 100); // Maintenance, vacancy, etc.
var totalMonthlyExpensesWithoutMortgage = monthlyTax + monthlyInsurance + monthlyHOA + monthlyVariableExpenses;
var totalMonthlyExpenses = totalMonthlyExpensesWithoutMortgage + monthlyMortgage;
// Cash Flow
var monthlyCashFlow = monthlyRent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// NOI (Net Operating Income) -> Rent – Operating Expenses (Not including mortgage)
var annualOperatingExpenses = totalMonthlyExpensesWithoutMortgage * 12;
var annualNOI = (monthlyRent * 12) – annualOperatingExpenses;
// ROI Calculations
var totalCashInvested = downPaymentAmount + closingCosts;
var cashOnCashROI = 0;
if (totalCashInvested > 0) {
cashOnCashROI = (annualCashFlow / totalCashInvested) * 100;
}
// Cap Rate
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
// 4. Update UI
// Format formatting helper
function formatMoney(num) {
return "$" + num.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
}
function formatPercent(num) {
return num.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "%";
}
document.getElementById("res-mortgage").innerHTML = formatMoney(monthlyMortgage);
document.getElementById("res-expenses").innerHTML = formatMoney(totalMonthlyExpenses);
document.getElementById("res-cashflow").innerHTML = formatMoney(monthlyCashFlow);
document.getElementById("res-noi").innerHTML = formatMoney(annualNOI);
document.getElementById("res-roi").innerHTML = formatPercent(cashOnCashROI);
document.getElementById("res-caprate").innerHTML = formatPercent(capRate);
// Color coding for cash flow
var cashFlowElem = document.getElementById("res-cashflow");
if (monthlyCashFlow >= 0) {
cashFlowElem.style.color = "#2e7d32"; // Green
} else {
cashFlowElem.style.color = "#c62828"; // Red
}
}