Breakdown:
Monthly Mortgage (P&I): —
Net Operating Income (NOI) [Annual]: —
Mastering Rental Property Analysis
Success in real estate investing rarely comes from guessing. It comes from rigorous analysis of the numbers. A Rental Property Cash Flow Calculator is an essential tool for investors to determine whether a specific property will generate profit (positive cash flow) or drain resources (negative cash flow).
Key Metrics Explained
1. Monthly Cash Flow
This is the money left over after all bills are paid. It is calculated by taking your Gross Rental Income and subtracting all vacancies and expenses, including the mortgage. Positive cash flow means the asset pays you to own it.
NOI is a critical metric that measures the profitability of an income-generating property before adding in any costs from financing or taxes. It helps you compare properties regardless of how they are financed.
3. Cash on Cash Return (CoC)
This percentage tells you how hard your actual invested cash is working. If you put $50,000 down on a house and it generates $5,000 a year in profit, your CoC return is 10%. This is often a better metric than pure ROI for rental properties because it accounts for leverage.
Common Expenses Investors Forget
Vacancy: Properties aren't rented 365 days a year forever. Always budget 5-10% for turnover periods.
CapEx (Capital Expenditures): Big items like roofs, HVAC systems, and water heaters eventually break. Setting aside 5-10% of rent monthly prevents "surprise" bankruptcies.
Property Management: Even if you self-manage now, calculating this expense (usually 8-10%) ensures the deal still works if you decide to hire a professional later.
The 1% Rule
A quick rule of thumb used by many investors for screening properties is the 1% rule. It states that the monthly rent should be at least 1% of the purchase price. While this calculator provides a detailed analysis, the 1% rule is a good starting point to see if a property is worth a deeper look.
function calculateCashFlow() {
// 1. Get Inputs
var price = parseFloat(document.getElementById('purchasePrice').value);
var downPercent = parseFloat(document.getElementById('downPaymentPercent').value);
var interest = parseFloat(document.getElementById('interestRate').value);
var years = parseFloat(document.getElementById('loanTerm').value);
var rent = parseFloat(document.getElementById('monthlyRent').value);
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value);
var taxAnnual = parseFloat(document.getElementById('annualTax').value);
var insuranceAnnual = parseFloat(document.getElementById('annualInsurance').value);
var pmPercent = parseFloat(document.getElementById('propManagement').value);
var maintPercent = parseFloat(document.getElementById('maintenance').value);
var capexPercent = parseFloat(document.getElementById('capex').value);
// Validation
if (isNaN(price) || isNaN(rent)) {
alert("Please enter valid numbers for Price and Rent.");
return;
}
// 2. Loan Calculations
var downPaymentAmount = price * (downPercent / 100);
var loanAmount = price – downPaymentAmount;
var monthlyRate = (interest / 100) / 12;
var numberOfPayments = years * 12;
// Mortgage Payment Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var monthlyMortgage = 0;
if (interest > 0) {
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
} else {
monthlyMortgage = loanAmount / numberOfPayments;
}
// 3. Income Calculations
var vacancyAmount = rent * (vacancyRate / 100);
var effectiveGrossIncome = rent – vacancyAmount;
// 4. Operating Expenses (Monthly)
var taxMonthly = taxAnnual / 12;
var insuranceMonthly = insuranceAnnual / 12;
var pmAmount = rent * (pmPercent / 100); // Usually charged on collected rent or gross, assuming gross here for safety
var maintAmount = rent * (maintPercent / 100);
var capexAmount = rent * (capexPercent / 100);
var totalOperatingExpenses = taxMonthly + insuranceMonthly + pmAmount + maintAmount + capexAmount;
// 5. Final Metrics
var totalMonthlyExpenses = totalOperatingExpenses + monthlyMortgage;
var monthlyCashFlow = effectiveGrossIncome – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// NOI (Annual) = (Effective Gross Income – Operating Expenses) * 12
var annualNOI = (effectiveGrossIncome – totalOperatingExpenses) * 12;
// Cap Rate = (Annual NOI / Current Market Value) * 100
var capRate = (annualNOI / price) * 100;
// Cash on Cash Return = (Annual Cash Flow / Total Cash Invested) * 100
// Cash Invested approx = Down Payment (Ignoring closing costs for this simplified calc, or could assume ~3%)
var cashInvested = downPaymentAmount;
var cocReturn = 0;
if (cashInvested > 0) {
cocReturn = (annualCashFlow / cashInvested) * 100;
}
// 6. Display Results
var resultsArea = document.getElementById('resultsArea');
resultsArea.style.display = "block";
// Helper for currency formatting
var fmtMoney = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' });
var fmtPercent = new Intl.NumberFormat('en-US', { style: 'percent', minimumFractionDigits: 2 });
var cfElement = document.getElementById('monthlyCashFlow');
cfElement.innerText = fmtMoney.format(monthlyCashFlow);
// Style cash flow color
if (monthlyCashFlow >= 0) {
cfElement.className = "result-value positive-flow";
} else {
cfElement.className = "result-value negative-flow";
}
document.getElementById('cocReturn').innerText = cocReturn.toFixed(2) + "%";
document.getElementById('capRate').innerText = capRate.toFixed(2) + "%";
document.getElementById('totalMonthlyExpenses').innerText = fmtMoney.format(totalMonthlyExpenses);
document.getElementById('monthlyMortgageResult').innerText = fmtMoney.format(monthlyMortgage);
document.getElementById('annualNOIResult').innerText = fmtMoney.format(annualNOI);
// Scroll to results
resultsArea.scrollIntoView({ behavior: 'smooth' });
}