Investing in real estate is one of the most reliable ways to build wealth, but the success of an investment property hinges on the numbers. This Rental Property Cash Flow Calculator is designed to help investors determine the viability of a potential deal by analyzing income, expenses, and overall return on investment (ROI).
Key Metrics Explained
To make an informed decision, you need to understand the output of this calculator:
Monthly Net Cash Flow: This is your profit after all expenses (mortgage, taxes, insurance, repairs) are paid. Positive cash flow means the property pays for itself and puts money in your pocket.
Cash on Cash Return (CoC): This metric measures the annual return on the actual cash you invested (down payment + closing costs), rather than the total purchase price. It is often considered the most important metric for rental investors. A CoC return of 8-12% is typically considered good.
Cap Rate (Capitalization Rate): This represents the rate of return on a real estate investment property based on the income that the property is expected to generate, excluding financing costs. It helps compare properties regardless of how they are purchased (cash vs. loan).
Inputs Guide
Vacancy Rate: Always account for times when the property is empty. A standard conservative estimate is 5-8% (about 2-4 weeks per year).
Management Fee: If you hire a property manager, they typically charge 8-10% of the monthly rent. If you manage it yourself, enter 0, but remember your time has value.
Maintenance/CapEx: Houses degrade over time. Budgeting for repairs (leaky faucets) and Capital Expenditures (new roof, HVAC) is critical. Setting aside $100-$200 month or 10% of rent is a prudent strategy.
How to Improve Cash Flow
If the calculator shows negative cash flow, consider negotiating a lower purchase price, increasing the down payment to lower the mortgage, or looking for ways to value-add to the property to justify higher rent. Remember, buying a property with negative cash flow is a speculation play, not an investment strategy.
function calculateCashFlow() {
// Get Inputs
var propPrice = parseFloat(document.getElementById('propPrice').value) || 0;
var closingCosts = parseFloat(document.getElementById('closingCosts').value) || 0;
var downPaymentPercent = parseFloat(document.getElementById('downPaymentPercent').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 annualTax = parseFloat(document.getElementById('annualTax').value) || 0;
var annualInsurance = parseFloat(document.getElementById('annualInsurance').value) || 0;
var mgmtFee = parseFloat(document.getElementById('mgmtFee').value) || 0;
var monthlyRepairs = parseFloat(document.getElementById('monthlyRepairs').value) || 0;
// 1. Calculate Mortgage
var downPaymentAmount = propPrice * (downPaymentPercent / 100);
var loanAmount = propPrice – downPaymentAmount;
var monthlyRate = (interestRate / 100) / 12;
var totalPayments = loanTerm * 12;
var monthlyMortgage = 0;
if (loanAmount > 0 && interestRate > 0) {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, totalPayments)) / (Math.pow(1 + monthlyRate, totalPayments) – 1);
} else if (loanAmount > 0 && interestRate === 0) {
monthlyMortgage = loanAmount / totalPayments;
}
// 2. Calculate Operating Expenses
var vacancyCost = monthlyRent * (vacancyRate / 100);
var mgmtCost = monthlyRent * (mgmtFee / 100);
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
var totalOpExpenses = vacancyCost + mgmtCost + monthlyTax + monthlyInsurance + monthlyRepairs;
var totalMonthlyExpenses = totalOpExpenses + monthlyMortgage;
// 3. Calculate Cash Flow
var monthlyCashFlow = monthlyRent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// 4. Calculate ROI Metrics
var totalInvested = downPaymentAmount + closingCosts;
var cashOnCash = 0;
if (totalInvested > 0) {
cashOnCash = (annualCashFlow / totalInvested) * 100;
}
var noi = (monthlyRent * 12) – (totalOpExpenses * 12);
var capRate = 0;
if (propPrice > 0) {
capRate = (noi / propPrice) * 100;
}
// Display Results
document.getElementById('results-area').style.display = 'block';
document.getElementById('resMortgage').innerText = formatMoney(monthlyMortgage);
document.getElementById('resExpenses').innerText = formatMoney(totalMonthlyExpenses);
var cashFlowEl = document.getElementById('resCashFlow');
cashFlowEl.innerText = formatMoney(monthlyCashFlow);
if (monthlyCashFlow < 0) {
cashFlowEl.classList.add('negative');
cashFlowEl.classList.remove('highlight-result');
} else {
cashFlowEl.classList.remove('negative');
cashFlowEl.classList.add('highlight-result');
}
var annualFlowEl = document.getElementById('resAnnualFlow');
annualFlowEl.innerText = formatMoney(annualCashFlow);
if (annualCashFlow < 0) annualFlowEl.classList.add('negative');
else annualFlowEl.classList.remove('negative');
document.getElementById('resInvested').innerText = formatMoney(totalInvested);
var cocEl = document.getElementById('resCOC');
cocEl.innerText = cashOnCash.toFixed(2) + "%";
if (cashOnCash < 0) cocEl.classList.add('negative');
else cocEl.classList.remove('negative');
document.getElementById('resCapRate').innerText = capRate.toFixed(2) + "%";
}
function formatMoney(amount) {
return "$" + amount.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}