Analyze the profitability and ROI of your real estate investment.
Purchase Information
Loan Details
Rental Income
Operating Expenses
Investment Performance
Monthly Cash Flow
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Net Operating Income (Annual)
$0.00
Cash on Cash Return
0.00%
Cap Rate
0.00%
Total Cash Needed
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Monthly Mortgage
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Understanding Real Estate Rental Metrics
Investing in rental properties is one of the most powerful ways to build wealth, but simply buying a property and renting it out doesn't guarantee a profit. To succeed, investors must understand the key financial metrics that determine whether a deal is solid or speculative. This calculator provides a comprehensive analysis of the most critical numbers: Cash Flow, Net Operating Income (NOI), Cap Rate, and Cash on Cash Return.
1. Net Operating Income (NOI)
NOI is the total income generated by the property after deducting operating expenses but before deducting mortgage payments and taxes. It is a raw measure of the property's efficiency.
Cash flow is the profit you take home at the end of the month after all expenses, including the mortgage, have been paid. Positive cash flow is essential for long-term sustainability. It acts as a buffer against vacancies and repairs while providing passive income.
Formula: NOI – Annual Debt Service (Mortgage Payments)
3. Capitalization Rate (Cap Rate)
The Cap Rate measures the rate of return on a real estate investment property based on the income that the property is expected to generate. It is useful for comparing different properties as if they were purchased with all cash (ignoring financing).
Formula: (NOI / Purchase Price) × 100
Generally, a higher cap rate implies a higher return, but often comes with higher risk or a less desirable location.
4. Cash on Cash Return (CoC)
This is arguably the most important metric for investors using leverage (mortgages). It measures the annual return on the actual cash you invested (Down Payment + Closing Costs), rather than the total value of the property.
Formula: (Annual Cash Flow / Total Cash Invested) × 100
For example, if you invest $50,000 cash to buy a $200,000 property and it generates $5,000 in annual cash flow, your CoC return is 10%. This allows you to compare real estate returns against other investment vehicles like stocks or bonds.
How to Use This Calculator
Purchase Information: Enter the negotiated price and estimated closing costs (inspections, title fees, etc.).
Loan Details: Input your down payment amount and mortgage terms. This calculates your monthly debt service.
Rental Income: Be realistic with your rent estimates. Include a vacancy rate (typically 5-8%) to account for turnover periods.
Operating Expenses: Don't forget maintenance! Even new homes require upkeep. A standard rule of thumb is budgeting 1% of the property value per year or 10% of rent for repairs.
function calculateRental() {
// 1. Get Input Values
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value) || 0;
var closingCosts = parseFloat(document.getElementById('closingCosts').value) || 0;
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var interestRate = parseFloat(document.getElementById('interestRate').value) || 0;
var loanTerm = parseFloat(document.getElementById('loanTerm').value) || 0;
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value) || 0;
var propertyTax = parseFloat(document.getElementById('propertyTax').value) || 0;
var insurance = parseFloat(document.getElementById('insurance').value) || 0;
var hoa = parseFloat(document.getElementById('hoa').value) || 0;
var maintenance = parseFloat(document.getElementById('maintenance').value) || 0;
// 2. Calculate Mortgage (Principal and Interest)
var loanAmount = purchasePrice – downPayment;
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
var monthlyMortgage = 0;
if (loanAmount > 0 && interestRate > 0) {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
} else if (loanAmount > 0 && interestRate === 0) {
monthlyMortgage = loanAmount / numberOfPayments;
}
// 3. Calculate Income
var grossAnnualIncome = monthlyRent * 12;
var vacancyLoss = grossAnnualIncome * (vacancyRate / 100);
var effectiveGrossIncome = grossAnnualIncome – vacancyLoss;
// 4. Calculate Expenses
var annualHOA = hoa * 12;
var annualMaintenance = maintenance * 12;
var totalOperatingExpenses = propertyTax + insurance + annualHOA + annualMaintenance;
// 5. Calculate NOI (Net Operating Income)
var noi = effectiveGrossIncome – totalOperatingExpenses;
// 6. Calculate Cash Flow
var annualDebtService = monthlyMortgage * 12;
var annualCashFlow = noi – annualDebtService;
var monthlyCashFlow = annualCashFlow / 12;
// 7. Calculate Returns
var totalCashInvested = downPayment + closingCosts;
var cocReturn = 0;
var capRate = 0;
if (totalCashInvested > 0) {
cocReturn = (annualCashFlow / totalCashInvested) * 100;
}
if (purchasePrice > 0) {
capRate = (noi / purchasePrice) * 100;
}
// 8. Display Results
var cashFlowEl = document.getElementById('monthlyCashFlow');
cashFlowEl.innerText = formatCurrency(monthlyCashFlow);
if(monthlyCashFlow >= 0) {
cashFlowEl.className = 'value positive';
} else {
cashFlowEl.className = 'value negative';
}
var noiEl = document.getElementById('annualNOI');
noiEl.innerText = formatCurrency(noi);
var cocEl = document.getElementById('cocReturn');
cocEl.innerText = cocReturn.toFixed(2) + '%';
if(cocReturn >= 0) {
cocEl.className = 'value positive';
} else {
cocEl.className = 'value negative';
}
document.getElementById('capRate').innerText = capRate.toFixed(2) + '%';
document.getElementById('totalCash').innerText = formatCurrency(totalCashInvested);
document.getElementById('monthlyMortgage').innerText = formatCurrency(monthlyMortgage);
// Show result area
document.getElementById('results-area').style.display = 'block';
}
function formatCurrency(num) {
return new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' }).format(num);
}