Rental Property Cash Flow Calculator
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Investment Analysis
Estimated Monthly Cash Flow
$0.00
Annual: $0.00
Cap Rate
0.00%
Cash on Cash Return
0.00%
Net Operating Income
$0
Monthly Mortgage
$0
Expense Breakdown (Monthly)
-
Mortgage (P&I)
$0.00
-
Taxes & Insurance
$0.00
-
Vacancy, Maint, Mgmt
$0.00
-
Total Monthly Outflow
$0.00
How to Analyze a Rental Property Investment
Investing in rental real estate is one of the most proven ways to build long-term wealth. However, the difference between a profitable investment and a financial burden often comes down to the numbers. This Rental Property Cash Flow Calculator is designed to help investors look past the listing price and understand the true profitability of a potential deal.
Key Metrics Explained
1. Cash Flow
Cash Flow is the profit you bring in each month after all expenses are paid. It is calculated by subtracting your total monthly expenses (mortgage, taxes, insurance, repairs, etc.) from your total monthly rental income. Positive cash flow means the property pays for itself and puts money in your pocket, while negative cash flow requires you to contribute monthly to keep the property afloat.
2. Net Operating Income (NOI)
NOI is a critical metric used to determine the profitability of a real estate property before financing costs. It is calculated as:
NOI = Total Revenue - Operating Expenses
Operating expenses include maintenance, vacancy, taxes, and insurance, but exclude mortgage payments (principal and interest). NOI helps compare properties regardless of how they are financed.
3. Cap Rate (Capitalization Rate)
The Cap Rate measures the rate of return on an investment property based on its income. It is a quick way to compare the relative value of different real estate investments.
Cap Rate = (Annual NOI / Purchase Price) × 100
A higher cap rate generally implies a higher return, but often comes with higher risk (e.g., properties in less desirable neighborhoods). A lower cap rate typically indicates a safer, more stable asset.
4. Cash on Cash Return
This metric calculates the cash income earned on the cash invested. Unlike Cap Rate, it takes into account debt service (mortgage).
CoC Return = (Annual Cash Flow / Total Cash Invested) × 100
This is often the most important metric for investors using leverage, as it shows exactly how hard your down payment is working for you.
Common Operating Expenses to Consider
- Vacancy Rate: Properties are rarely occupied 100% of the time. It is prudent to budget 5-10% of gross rent for vacancy periods.
- Maintenance & Repairs: Things break. Setting aside 5-15% of the rent ensures you have funds for painting, plumbing, and general upkeep.
- Property Management: If you don't plan to be a landlord yourself, expect to pay a property manager 8-12% of the monthly rent.
- Capital Expenditures (CapEx): Major expenses like a new roof or HVAC system should be budgeted for separately over the long term.
How to Use This Calculator
Start by inputting the purchase price and your financing details. Be realistic with your rental income estimates; check local rental comps (comparables) to see what similar properties are renting for. Do not underestimate expenses—it is always safer to be conservative with maintenance and vacancy estimates than to be surprised by unexpected costs.
function calculateCashFlow() {
// Get Inputs
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value) || 0;
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var downPaymentPercent = parseFloat(document.getElementById('downPayment').value) || 0;
var interestRate = parseFloat(document.getElementById('interestRate').value) || 0;
var loanTerm = parseFloat(document.getElementById('loanTerm').value) || 0;
var propertyTax = parseFloat(document.getElementById('propertyTax').value) || 0;
var insurance = parseFloat(document.getElementById('insurance').value) || 0;
var maintenancePercent = parseFloat(document.getElementById('maintenance').value) || 0;
var vacancyPercent = parseFloat(document.getElementById('vacancy').value) || 0;
var managementPercent = parseFloat(document.getElementById('management').value) || 0;
// 1. Calculate Mortgage
var downPaymentAmount = purchasePrice * (downPaymentPercent / 100);
var loanAmount = purchasePrice – downPaymentAmount;
var monthlyInterestRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
var monthlyMortgage = 0;
if (loanAmount > 0 && interestRate > 0) {
monthlyMortgage = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else if (loanAmount > 0 && interestRate === 0) {
monthlyMortgage = loanAmount / numberOfPayments;
}
// 2. Calculate Operating Expenses (Monthly)
var monthlyTax = propertyTax / 12;
var monthlyInsurance = insurance / 12;
var monthlyMaintenance = monthlyRent * (maintenancePercent / 100);
var monthlyVacancy = monthlyRent * (vacancyPercent / 100);
var monthlyManagement = monthlyRent * (managementPercent / 100);
var totalOperatingExpenses = monthlyTax + monthlyInsurance + monthlyMaintenance + monthlyVacancy + monthlyManagement;
var totalMonthlyExpenses = totalOperatingExpenses + monthlyMortgage;
// 3. Calculate NOI
var monthlyNOI = monthlyRent – totalOperatingExpenses;
var annualNOI = monthlyNOI * 12;
// 4. Calculate Cash Flow
var monthlyCashFlow = monthlyNOI – monthlyMortgage;
var annualCashFlow = monthlyCashFlow * 12;
// 5. Calculate Ratios
var capRate = (annualNOI / purchasePrice) * 100;
// Cash Invested (Assuming just Down Payment for simplicity, ideally + closing costs)
var cashInvested = downPaymentAmount;
var cashOnCash = 0;
if (cashInvested > 0) {
cashOnCash = (annualCashFlow / cashInvested) * 100;
} else if (annualCashFlow > 0) {
cashOnCash = Infinity; // technically infinite return if 0 down
}
// Format and Display Results
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
var percentFormatter = new Intl.NumberFormat('en-US', {
style: 'percent',
minimumFractionDigits: 2
});
// Update DOM
document.getElementById('monthlyCashFlow').innerText = formatter.format(monthlyCashFlow);
document.getElementById('annualCashFlow').innerText = 'Annual: ' + formatter.format(annualCashFlow);
document.getElementById('capRate').innerText = capRate.toFixed(2) + '%';
document.getElementById('cashOnCash').innerText = cashOnCash.toFixed(2) + '%';
document.getElementById('noiAnnual').innerText = formatter.format(annualNOI); // Display Annual NOI usually
document.getElementById('monthlyMortgage').innerText = formatter.format(monthlyMortgage);
document.getElementById('dispMortgage').innerText = formatter.format(monthlyMortgage);
document.getElementById('dispTaxIns').innerText = formatter.format(monthlyTax + monthlyInsurance);
document.getElementById('dispOps').innerText = formatter.format(monthlyMaintenance + monthlyVacancy + monthlyManagement);
document.getElementById('dispTotalExpenses').innerText = formatter.format(totalMonthlyExpenses);
// Color coding
var cfElement = document.getElementById('monthlyCashFlow');
if (monthlyCashFlow >= 0) {
cfElement.classList.remove('negative');
cfElement.classList.add('positive');
} else {
cfElement.classList.remove('positive');
cfElement.classList.add('negative');
}
}
// Initialize calculation on load
window.onload = function() {
calculateCashFlow();
};