Investing in real estate is one of the most reliable ways to build wealth, but it relies heavily on the numbers. A "good deal" isn't determined by the look of the house, but by the math behind it. This Rental Property Cash Flow Calculator helps you evaluate the potential profitability of an investment property before you make an offer.
Pro Tip: Don't forget to account for "phantom expenses" like vacancy and repairs. Even if a tenant pays on time today, you need to set aside reserves for roof replacements or months when the unit is empty.
Understanding the Key Metrics
When analyzing a rental property, three metrics are paramount:
Net Operating Income (NOI): This is your total income minus operating expenses (excluding mortgage payments). It represents the profitability of the property itself, regardless of how it is financed.
Cash Flow: This is the money left in your pocket every month after all expenses and mortgage payments are made. Positive cash flow is essential for long-term sustainability.
Cash on Cash Return (CoC): This measures the return on the actual cash you invested (down payment + closing costs). A 10% CoC means you earn $10 for every $100 invested annually.
Realistic Expense Estimates
One common mistake for new investors is underestimating expenses. Here are some industry standards to consider when using the calculator:
Vacancy Rate: Typically 5% to 8% in urban areas. This assumes the property sits empty for 2-4 weeks per year between tenants.
Repairs & Maintenance: Set aside 5% to 10% of monthly rent. Older homes generally require a higher percentage than new builds.
Management Fees: Professional property managers usually charge between 8% and 12% of the collected monthly rent.
Example Scenario
Let's say you purchase a duplex for $250,000 with a 20% down payment ($50,000). The property rents for $2,200 per month. Your mortgage payment might be around $1,200. After adding taxes ($300/mo), insurance ($100/mo), and setting aside funds for repairs and vacancy ($300/mo), your total expenses might be $1,900.
In this scenario, your Monthly Cash Flow would be $300 ($2,200 income – $1,900 expenses). Over a year, that is $3,600 in profit. Divided by your initial cash investment (approx $55,000 with closing costs), your Cash on Cash return would be roughly 6.5%.
function calculateCashFlow() {
// 1. Get Inputs
var price = parseFloat(document.getElementById('purchasePrice').value);
var downPercent = parseFloat(document.getElementById('downPaymentPercent').value);
var interestRate = parseFloat(document.getElementById('interestRate').value);
var loanTerm = parseFloat(document.getElementById('loanTerm').value);
var closingCosts = parseFloat(document.getElementById('closingCosts').value);
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value);
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value);
var annualTax = parseFloat(document.getElementById('propertyTax').value);
var annualIns = parseFloat(document.getElementById('insurance').value);
var monthlyHoa = parseFloat(document.getElementById('hoa').value);
var monthlyRepairs = parseFloat(document.getElementById('repairs').value);
var mgmtFeePercent = parseFloat(document.getElementById('mgmtFee').value);
// Validation
if (isNaN(price) || isNaN(monthlyRent) || isNaN(interestRate)) {
alert("Please enter valid numbers for Price, Rent, and Interest Rate.");
return;
}
// 2. Loan Calculations
var downPayment = price * (downPercent / 100);
var loanAmount = price – downPayment;
var monthlyRate = (interestRate / 100) / 12;
var totalPayments = loanTerm * 12;
// Mortgage P&I
var mortgagePayment = 0;
if (interestRate > 0) {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
} else {
mortgagePayment = loanAmount / totalPayments;
}
// 3. Income Calculations
var vacancyLoss = monthlyRent * (vacancyRate / 100);
var effectiveIncome = monthlyRent – vacancyLoss;
// 4. Expense Calculations (Monthly)
var monthlyTax = annualTax / 12;
var monthlyIns = annualIns / 12;
var mgmtFee = effectiveIncome * (mgmtFeePercent / 100); // Usually charged on collected rent
var totalOperatingExpenses = monthlyTax + monthlyIns + monthlyHoa + monthlyRepairs + mgmtFee + vacancyLoss; // Vacancy is technically lost income, but often categorized for NOI logic.
// For Cash Flow calc: Cash Flow = Rent – Vacancy – Operating Expenses – Debt Service.
// Let's group expenses strictly for the display
var monthlyExpensesNoDebt = monthlyTax + monthlyIns + monthlyHoa + monthlyRepairs + mgmtFee;
var totalMonthlyExpenses = monthlyExpensesNoDebt + mortgagePayment + vacancyLoss; // Including vacancy as a cost deduction from Gross
// 5. Metrics
var cashFlow = monthlyRent – totalMonthlyExpenses;
var annualCashFlow = cashFlow * 12;
var totalCashInvested = downPayment + closingCosts;
// NOI = (Gross Rent – Vacancy) – Operating Expenses (No Debt Service)
var annualNOI = (effectiveIncome – monthlyExpensesNoDebt) * 12;
var cashOnCash = 0;
if (totalCashInvested > 0) {
cashOnCash = (annualCashFlow / totalCashInvested) * 100;
}
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
// 6. Update Display
document.getElementById('results-area').style.display = 'block';
// Helper for currency formatting
var fmtMoney = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
var fmtPct = new Intl.NumberFormat('en-US', { style: 'percent', minimumFractionDigits: 2 });
document.getElementById('res-gross-rent').innerText = fmtMoney.format(monthlyRent);
document.getElementById('res-vacancy').innerText = "-" + fmtMoney.format(vacancyLoss);
document.getElementById('res-effective-income').innerText = fmtMoney.format(effectiveIncome);
document.getElementById('res-mortgage').innerText = "-" + fmtMoney.format(mortgagePayment);
document.getElementById('res-tax').innerText = "-" + fmtMoney.format(monthlyTax);
document.getElementById('res-ins').innerText = "-" + fmtMoney.format(monthlyIns);
document.getElementById('res-mgmt').innerText = "-" + fmtMoney.format(mgmtFee);
document.getElementById('res-other').innerText = "-" + fmtMoney.format(monthlyHoa + monthlyRepairs);
document.getElementById('res-total-expenses').innerText = "-" + fmtMoney.format(totalMonthlyExpenses);
var cfElement = document.getElementById('res-cashflow');
cfElement.innerText = fmtMoney.format(cashFlow);
if (cashFlow >= 0) {
cfElement.className = "positive-flow";
} else {
cfElement.className = "negative-flow";
}
document.getElementById('res-coc').innerText = cashOnCash.toFixed(2) + "%";
document.getElementById('res-cap').innerText = capRate.toFixed(2) + "%";
document.getElementById('res-noi').innerText = fmtMoney.format(annualNOI);
}