Analyze your real estate investment potential instantly.
Investment Analysis
Total Initial Investment (Cash to Close):$0
Monthly Mortgage Payment (P&I):$0
Monthly Cash Flow:$0
Annual Cash Flow:$0
Net Operating Income (NOI):$0
Cash on Cash Return (CoC):0%
Cap Rate:0%
function calculateRentalROI() {
// 1. Get Inputs
var price = parseFloat(document.getElementById('purchasePrice').value) || 0;
var closing = parseFloat(document.getElementById('closingCosts').value) || 0;
var downPerc = parseFloat(document.getElementById('downPaymentPerc').value) || 0;
var rate = parseFloat(document.getElementById('interestRate').value) || 0;
var term = parseFloat(document.getElementById('loanTerm').value) || 0;
var rent = parseFloat(document.getElementById('monthlyRent').value) || 0;
var vacancy = parseFloat(document.getElementById('vacancyRate').value) || 0;
var expenses = parseFloat(document.getElementById('monthlyExpenses').value) || 0;
// 2. Calculate Investment Details
var downPaymentAmount = price * (downPerc / 100);
var loanAmount = price – downPaymentAmount;
var totalInitialInvestment = downPaymentAmount + closing;
// 3. Calculate Mortgage (Principal & Interest)
var monthlyMortgage = 0;
if (rate > 0 && term > 0) {
var monthlyRate = (rate / 100) / 12;
var numPayments = term * 12;
// Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1);
}
// 4. Calculate Income & Cash Flow
var vacancyLoss = rent * (vacancy / 100);
var effectiveGrossIncome = rent – vacancyLoss;
var totalMonthlyExpenses = expenses + monthlyMortgage;
var monthlyCashFlow = effectiveGrossIncome – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// 5. Calculate Metrics
// NOI = Effective Income – Operating Expenses (excluding mortgage)
var annualNOI = (effectiveGrossIncome – expenses) * 12;
// CoC = Annual Cash Flow / Total Initial Investment
var cocReturn = 0;
if (totalInitialInvestment > 0) {
cocReturn = (annualCashFlow / totalInitialInvestment) * 100;
}
// Cap Rate = Annual NOI / Purchase Price
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
// 6. Formatting Helper
var formatCurrency = function(num) {
return '$' + num.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
};
var formatPercent = function(num) {
return num.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + '%';
};
// 7. Display Results
document.getElementById('resTotalInvestment').innerText = formatCurrency(totalInitialInvestment);
document.getElementById('resMortgage').innerText = formatCurrency(monthlyMortgage);
document.getElementById('resMonthlyCashFlow').innerText = formatCurrency(monthlyCashFlow);
document.getElementById('resAnnualCashFlow').innerText = formatCurrency(annualCashFlow);
document.getElementById('resNOI').innerText = formatCurrency(annualNOI);
document.getElementById('resCoC').innerText = formatPercent(cocReturn);
document.getElementById('resCapRate').innerText = formatPercent(capRate);
// Show result section
document.getElementById('resultsSection').style.display = 'block';
// Color coding for cash flow
var cashFlowEl = document.getElementById('resMonthlyCashFlow');
if (monthlyCashFlow >= 0) {
cashFlowEl.style.color = '#27ae60';
} else {
cashFlowEl.style.color = '#c0392b';
}
}
Understanding Cash on Cash Return in Real Estate
When investing in rental properties, understanding your return on investment (ROI) is crucial for making informed financial decisions. While there are many metrics available—such as Cap Rate and Gross Rent Multiplier—Cash on Cash Return (CoC) is often considered the most important metric for investors using leverage (mortgages).
Definition: Cash on Cash Return measures the annual pre-tax cash flow generated by the property divided by the total cash invested. It effectively tells you how hard your money is working for you.
Why Use This Calculator?
This Rental Property Cash on Cash Return Calculator allows you to factor in all variables, including vacancy rates, operating expenses (like HOA fees, insurance, and maintenance), and financing costs. By inputting accurate data, you can simulate different scenarios to determine if a property meets your investment criteria.
Key Metrics Explained
Cash Flow: The net amount of cash moving in or out of the investment each month after all debts and expenses are paid. Positive cash flow is essential for long-term sustainability.
Net Operating Income (NOI): This represents the profitability of the property before financing costs and taxes. It is calculated by subtracting operating expenses from effective gross income.
Cap Rate (Capitalization Rate): A measure of the property's natural rate of return assuming it was bought in all cash. It is useful for comparing the relative value of different properties, regardless of financing.
How to Interpret Your Results
A "good" Cash on Cash return varies by investor and market strategy. Generally:
8-12%: Often considered a solid return in many stable markets.
15%+: Considered excellent, though often associated with higher-risk properties or "fixer-uppers" that require significant sweat equity.
Below 5%: Might be acceptable in high-appreciation markets where the primary goal is long-term equity growth rather than immediate cash flow.
Improving Your ROI
If the calculator shows a return lower than your target, consider these adjustments:
Negotiate a lower purchase price.
Shop for better financing terms (lower interest rate).
Look for ways to increase rent (e.g., cosmetic renovations).
Reduce operating expenses (e.g., self-management vs. property management).
Use the calculator above to tweak these numbers and see how small changes can significantly impact your annual returns.