function calculateRental() {
// 1. Get Values
var price = parseFloat(document.getElementById('rp_price').value) || 0;
var downPercent = parseFloat(document.getElementById('rp_down').value) || 0;
var interestRate = parseFloat(document.getElementById('rp_rate').value) || 0;
var termYears = parseFloat(document.getElementById('rp_term').value) || 0;
var rent = parseFloat(document.getElementById('rp_rent').value) || 0;
var vacancyRate = parseFloat(document.getElementById('rp_vacancy').value) || 0;
var annualTaxIns = parseFloat(document.getElementById('rp_tax_ins').value) || 0;
var monthlyMaint = parseFloat(document.getElementById('rp_main_capex').value) || 0;
// 2. Calculate Mortgage (Principal & Interest)
var downPayment = price * (downPercent / 100);
var loanAmount = price – downPayment;
var monthlyRate = (interestRate / 100) / 12;
var totalPayments = termYears * 12;
var mortgagePayment = 0;
if (monthlyRate > 0 && totalPayments > 0) {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
} else if (monthlyRate === 0 && totalPayments > 0) {
mortgagePayment = loanAmount / totalPayments;
}
// 3. Calculate Operating Expenses & Income
var monthlyTaxIns = annualTaxIns / 12;
var vacancyLoss = rent * (vacancyRate / 100);
var effectiveIncome = rent – vacancyLoss;
// Operating Expenses (Excluding Mortgage)
var operatingExpensesMonthly = monthlyTaxIns + monthlyMaint;
// Total Expenses (Including Mortgage for Cash Flow)
var totalMonthlyExpenses = operatingExpensesMonthly + mortgagePayment;
// 4. Calculate Key Metrics
var monthlyCashFlow = effectiveIncome – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// NOI (Annual Income – Annual Operating Expenses, No Mortgage)
var annualNOI = (effectiveIncome – operatingExpensesMonthly) * 12;
// Cap Rate = (NOI / Price) * 100
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
// Cash on Cash Return = (Annual Cash Flow / Total Cash Invested) * 100
// Total Cash Invested assumed to be Down Payment for simplicity in this specific calc
var cocReturn = 0;
if (downPayment > 0) {
cocReturn = (annualCashFlow / downPayment) * 100;
}
// 5. Update UI
document.getElementById('rp_results').style.display = 'block';
document.getElementById('res_mortgage').innerText = '$' + mortgagePayment.toFixed(2);
document.getElementById('res_expenses').innerText = '$' + totalMonthlyExpenses.toFixed(2);
document.getElementById('res_noi').innerText = '$' + annualNOI.toFixed(2);
var cfElement = document.getElementById('res_cashflow');
cfElement.innerText = '$' + monthlyCashFlow.toFixed(2);
if(monthlyCashFlow < 0) {
cfElement.classList.add('rp-neg');
cfElement.classList.remove('rp-highlight');
} else {
cfElement.classList.remove('rp-neg');
cfElement.classList.add('rp-highlight');
}
document.getElementById('res_cap').innerText = capRate.toFixed(2) + '%';
var cocElement = document.getElementById('res_coc');
cocElement.innerText = cocReturn.toFixed(2) + '%';
if(cocReturn < 0) {
cocElement.classList.add('rp-neg');
} else {
cocElement.classList.remove('rp-neg');
}
}
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 and renting it out doesn't guarantee a profit. To succeed, investors must meticulously analyze the numbers. This Rental Property Cash Flow Calculator helps you evaluate the potential profitability of a deal by breaking down income, expenses, and return on investment (ROI).
Key Metrics Explained
Cash Flow: This is the net amount of money moving in or out of the investment each month. It is calculated as Total Income – Total Expenses (including mortgage). Positive cash flow means the property pays for itself and generates profit.
1. Net Operating Income (NOI)
NOI is a fundamental calculation in real estate valuation. It represents the annual income generated by the property after deducting operating expenses (vacancy, taxes, insurance, maintenance) but before deducting mortgage payments. NOI helps you compare the profitability of different properties regardless of financing structures.
2. Cap Rate (Capitalization Rate)
The Cap Rate measures the natural rate of return on an investment property, assuming it was bought entirely with cash. It is calculated by dividing the NOI by the property's purchase price. A higher Cap Rate generally indicates a higher potential return, but may also come with higher risk (e.g., a property in a declining neighborhood).
Formula: Cap Rate = (NOI / Purchase Price) × 100
Good Target: 5% to 10% (varies heavily by market)
3. Cash on Cash Return (CoC)
This metric is crucial for investors using leverage (mortgages). It measures the annual cash flow relative to the actual cash you invested (down payment + closing costs). It tells you how hard your specific dollars are working for you.
Why it matters: It helps you compare real estate returns against other investment vehicles like stocks or bonds.
Estimating Expenses Accurately
The biggest mistake new investors make is underestimating expenses. Always account for:
Vacancy: Properties won't be rented 365 days a year. A 5% to 8% vacancy allowance is standard.
Maintenance (CapEx): Roofs leak and water heaters break. Set aside 5% to 10% of rent for repairs.
Property Management: Even if you self-manage now, account for the 10% cost of a manager to ensure the deal works as a passive investment later.
Use the calculator above to run scenarios. Try adjusting the rent, interest rate, or down payment to see how sensitive your cash flow is to market changes.