function calculateRental() {
// 1. Get Inputs
var price = parseFloat(document.getElementById('rp_price').value) || 0;
var downPercent = parseFloat(document.getElementById('rp_down_percent').value) || 0;
var closing = parseFloat(document.getElementById('rp_closing').value) || 0;
var repair = parseFloat(document.getElementById('rp_repair').value) || 0;
var rate = parseFloat(document.getElementById('rp_rate').value) || 0;
var term = parseFloat(document.getElementById('rp_term').value) || 30;
var rent = parseFloat(document.getElementById('rp_rent').value) || 0;
var vacancyRate = parseFloat(document.getElementById('rp_vacancy').value) || 0;
var taxYear = parseFloat(document.getElementById('rp_tax').value) || 0;
var insuranceYear = parseFloat(document.getElementById('rp_insurance').value) || 0;
var hoaMonth = parseFloat(document.getElementById('rp_hoa').value) || 0;
var maintPercent = parseFloat(document.getElementById('rp_maintenance').value) || 0;
// 2. Calculations – Investment Basis
var downPayment = price * (downPercent / 100);
var loanAmount = price – downPayment;
var totalInvested = downPayment + closing + repair;
// 3. Mortgage Calculation
var monthlyRate = (rate / 100) / 12;
var totalMonths = term * 12;
var mortgagePayment = 0;
if (rate > 0) {
mortgagePayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalMonths)) / (Math.pow(1 + monthlyRate, totalMonths) – 1);
} else {
mortgagePayment = loanAmount / totalMonths;
}
// 4. Income Adjustments
var vacancyCost = rent * (vacancyRate / 100);
var effectiveIncome = rent – vacancyCost;
// 5. Monthly Expenses
var taxMonth = taxYear / 12;
var insuranceMonth = insuranceYear / 12;
var maintCost = rent * (maintPercent / 100);
var operatingExpenses = taxMonth + insuranceMonth + hoaMonth + maintCost + vacancyCost;
// Note: Vacancy is usually deducted from Gross Income to get Effective Gross Income,
// but for cash flow summation we treat it as a reduction.
// Standard NOI formula = (Gross Income – Vacancy) – Operating Expenses (Tax, Ins, Maint, Mgmt, HOA).
var noi = rent – vacancyCost – (taxMonth + insuranceMonth + hoaMonth + maintCost);
// 6. Cash Flow
var cashFlow = noi – mortgagePayment;
var annualCashFlow = cashFlow * 12;
// 7. Returns
var cocReturn = 0;
if (totalInvested > 0) {
cocReturn = (annualCashFlow / totalInvested) * 100;
}
var capRate = 0;
if (price > 0) {
capRate = ((noi * 12) / price) * 100;
}
// 8. Formatting Currency
var fmt = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
// 9. Display Results
document.getElementById('rp_results').style.display = 'block';
// Cash Flow with color
var cfElement = document.getElementById('res_cashflow');
cfElement.innerText = fmt.format(cashFlow);
cfElement.className = cashFlow >= 0 ? 'value rp-positive' : 'value rp-negative';
// COC with color
var cocElement = document.getElementById('res_coc');
cocElement.innerText = cocReturn.toFixed(2) + "%";
cocElement.className = cocReturn >= 0 ? 'value rp-positive' : 'value rp-negative';
// Other metrics
document.getElementById('res_noi').innerText = fmt.format(noi);
document.getElementById('res_total_exp').innerText = fmt.format(operatingExpenses + mortgagePayment); // Total cash outflow
document.getElementById('res_mortgage').innerText = fmt.format(mortgagePayment);
document.getElementById('res_cap').innerText = capRate.toFixed(2) + "%";
document.getElementById('res_invested').innerText = fmt.format(totalInvested);
}
Understanding Rental Property Cash Flow
Investing in real estate is one of the most reliable ways to build wealth, but the success of an investment hinges on the numbers. This Rental Property Calculator is designed to help investors analyze the financial viability of a potential property by determining its Cash Flow, Cash on Cash Return, and Cap Rate.
What is Positive Cash Flow?
Cash flow is the profit you take home each month after all operating expenses and debt service (mortgage payments) have been paid. It is calculated using the following formula:
Cash Flow = Total Rental Income – (Operating Expenses + Mortgage Payment)
A positive cash flow indicates that the property is generating income for you, while a negative cash flow means you are losing money every month to hold the asset. For buy-and-hold investors, achieving positive cash flow is critical for long-term sustainability.
Key Metrics Defined
When analyzing a deal, you shouldn't rely on just one metric. Here are the three most important figures this calculator provides:
NOI (Net Operating Income): This is the total income minus operating expenses (excluding the mortgage). It represents the profitability of the property regardless of how it is financed.
Cap Rate (Capitalization Rate): Calculated as (NOI / Purchase Price) × 100. This metric allows you to compare the profitability of different properties irrespective of financing. A higher Cap Rate generally implies a better return but may come with higher risk.
Cash on Cash (CoC) Return: This measures the return on the actual cash you invested (Down Payment + Closing Costs + Repairs). It is the most practical metric for understanding how hard your money is working for you.
How to Estimate Expenses Accurately
Novice investors often underestimate expenses, leading to negative cash flow surprises. Always account for:
Vacancy: Properties won't be occupied 100% of the time. A standard estimate is 5% to 8% of the gross rent.
Maintenance: Even if the house is new, things break. Set aside 5% to 15% of the monthly rent for repairs.
CapEx (Capital Expenditures): These are big-ticket items like roof replacements or HVAC systems. While not monthly costs, they should be budgeted for over time.
Frequently Asked Questions
What is a "Good" Cash on Cash Return?
While this varies by market and investor goals, a CoC return of 8% to 12% is generally considered solid for a rental property. Some investors aim for 15%+, while others in high-appreciation markets may accept 4-6%.
Should I include the mortgage in NOI?
No. Net Operating Income (NOI) accounts for operating expenses only (taxes, insurance, maintenance). It specifically excludes debt service (principal and interest) to allow for an "apples-to-apples" comparison of the property itself, not the financing structure.
What is the 50% Rule?
The 50% rule is a quick rule of thumb suggesting that 50% of your gross rental income will go toward operating expenses (excluding the mortgage). While useful for quick screening, you should always use a detailed calculator like the one above for a final decision.