function calculateRentalCashFlow() {
// 1. Get Inputs
var price = parseFloat(document.getElementById('rp-price').value);
var downPercent = parseFloat(document.getElementById('rp-down-payment').value);
var interestRate = parseFloat(document.getElementById('rp-interest-rate').value);
var termYears = parseFloat(document.getElementById('rp-loan-term').value);
var monthlyRent = parseFloat(document.getElementById('rp-rent').value);
var annualTax = parseFloat(document.getElementById('rp-tax').value);
var annualIns = parseFloat(document.getElementById('rp-insurance').value);
var monthlyHoa = parseFloat(document.getElementById('rp-hoa').value);
var vacancyPercent = parseFloat(document.getElementById('rp-vacancy').value);
var maintPercent = parseFloat(document.getElementById('rp-maintenance').value);
var mgmtPercent = parseFloat(document.getElementById('rp-management').value);
// Validation
if (isNaN(price) || isNaN(downPercent) || isNaN(interestRate) || isNaN(monthlyRent)) {
alert("Please ensure all fields are filled with valid numbers.");
return;
}
// 2. Loan Calculations
var downPaymentAmount = price * (downPercent / 100);
var loanAmount = price – downPaymentAmount;
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = termYears * 12;
// Mortgage Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
var monthlyMortgage = 0;
if (interestRate > 0) {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
} else {
monthlyMortgage = loanAmount / numberOfPayments;
}
// 3. Expense Calculations
var monthlyTax = annualTax / 12;
var monthlyIns = annualIns / 12;
var vacancyCost = monthlyRent * (vacancyPercent / 100);
var maintCost = monthlyRent * (maintPercent / 100);
var mgmtCost = monthlyRent * (mgmtPercent / 100);
var totalMonthlyExpenses = monthlyMortgage + monthlyTax + monthlyIns + monthlyHoa + vacancyCost + maintCost + mgmtCost;
var operatingExpensesOnly = totalMonthlyExpenses – monthlyMortgage; // Used for NOI
// 4. Profitability Calculations
var monthlyCashFlow = monthlyRent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
var monthlyNOI = monthlyRent – operatingExpensesOnly;
// Cash on Cash Return = Annual Pre-Tax Cash Flow / Total Cash Invested
// For simplicity, we assume Total Cash Invested = Down Payment.
// (In a more advanced version, we'd add closing costs and rehab costs).
var cashInvested = downPaymentAmount;
var cocReturn = 0;
if (cashInvested > 0) {
cocReturn = (annualCashFlow / cashInvested) * 100;
}
// 5. Update UI
document.getElementById('rp-res-mortgage').innerText = '$' + monthlyMortgage.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('rp-res-expenses').innerText = '$' + totalMonthlyExpenses.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('rp-res-noi').innerText = '$' + monthlyNOI.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
var cashFlowElem = document.getElementById('rp-res-cashflow');
cashFlowElem.innerText = '$' + monthlyCashFlow.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (monthlyCashFlow < 0) {
cashFlowElem.classList.add('negative');
} else {
cashFlowElem.classList.remove('negative');
}
var cocElem = document.getElementById('rp-res-coc');
cocElem.innerText = cocReturn.toFixed(2) + '%';
if (cocReturn < 0) {
cocElem.classList.add('negative');
} else {
cocElem.classList.remove('negative');
}
// Show results
document.getElementById('rp-results').style.display = 'block';
}
Understanding Rental Property Cash Flow
Investing in real estate is one of the most reliable ways to build wealth, but not every property is a good investment. The difference between a profitable asset and a financial liability often comes down to one metric: Cash Flow. Our Rental Property Calculator helps you analyze the numbers to make informed investment decisions.
What is Positive Cash Flow?
Positive cash flow occurs when a property's gross rental income exceeds all of its expenses, including the mortgage, taxes, insurance, and operating costs like maintenance and property management fees. Simply put, it is the profit you pocket every month after all bills are paid.
For example, if you collect $2,000 in rent and your total expenses are $1,700, your positive cash flow is $300 per month.
Key Metrics Calculated
NOI (Net Operating Income): This is your profitability before the mortgage payment is factored in. It helps compare the performance of properties regardless of financing structures. Formula: Income – Operating Expenses.
Cash on Cash Return (CoC): This is arguably the most important metric for ROI. It measures the annual cash flow relative to the actual cash you invested (down payment). A CoC return of 8-12% is generally considered good in the current market.
Why You Must Factor in "Hidden" Expenses
Novice investors often make the mistake of only subtracting the mortgage payment from the rent to determine profit. This calculator forces you to account for the "silent killers" of cash flow:
Vacancy: Properties don't stay rented 365 days a year. Setting aside 5-8% of rent for vacancy ensures you have reserves for turnover periods.
Maintenance: Roofs leak and toilets break. Allocating 5-10% for repairs keeps your cash flow realistic.
Property Management: Even if you self-manage now, calculating a typical 8-10% management fee ensures the deal still works if you decide to hire a professional later.
How to Improve Your Cash Flow
If the calculator shows negative or low cash flow, consider these strategies: negotiate a lower purchase price to reduce the mortgage, increase the down payment to lower monthly debt service, or look for ways to value-add to the property (like renovations) to justify higher rent.