Rental Property ROI & Cash Flow Calculator
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Investment Analysis
Net Operating Income (NOI)
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function calculateRentalROI() {
// 1. Get Input Values
var price = parseFloat(document.getElementById('prop_price').value) || 0;
var closing = parseFloat(document.getElementById('prop_closing').value) || 0;
var downPercent = parseFloat(document.getElementById('prop_down_percent').value) || 0;
var interest = parseFloat(document.getElementById('prop_interest').value) || 0;
var term = parseFloat(document.getElementById('prop_term').value) || 30;
var monthlyRent = parseFloat(document.getElementById('prop_rent').value) || 0;
var vacancyRate = parseFloat(document.getElementById('prop_vacancy').value) || 0;
var tax = parseFloat(document.getElementById('prop_tax').value) || 0;
var insurance = parseFloat(document.getElementById('prop_insurance').value) || 0;
var hoa = parseFloat(document.getElementById('prop_hoa').value) || 0;
var maintenance = parseFloat(document.getElementById('prop_maint').value) || 0;
var managementPercent = parseFloat(document.getElementById('prop_management').value) || 0;
// 2. Calculate Mortgage Payment
var downPayment = price * (downPercent / 100);
var loanAmount = price – downPayment;
var monthlyRate = (interest / 100) / 12;
var numberOfPayments = term * 12;
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. Calculate Income
var grossMonthlyIncome = monthlyRent;
var vacancyCost = grossMonthlyIncome * (vacancyRate / 100);
var effectiveMonthlyIncome = grossMonthlyIncome – vacancyCost;
var effectiveAnnualIncome = effectiveMonthlyIncome * 12;
// 4. Calculate Expenses
var managementCost = grossMonthlyIncome * (managementPercent / 100); // Usually based on gross collected
var totalMonthlyFixedExpenses = (tax / 12) + (insurance / 12) + (hoa / 12) + (maintenance / 12) + managementCost;
var totalAnnualOperatingExpenses = totalMonthlyFixedExpenses * 12;
// 5. Calculate Metrics
var annualNOI = effectiveAnnualIncome – totalAnnualOperatingExpenses;
var annualDebtService = monthlyMortgage * 12;
var annualCashFlow = annualNOI – annualDebtService;
var monthlyCashFlow = annualCashFlow / 12;
var totalCashInvested = downPayment + closing;
// Avoid division by zero
var cashOnCash = 0;
if (totalCashInvested > 0) {
cashOnCash = (annualCashFlow / totalCashInvested) * 100;
}
var capRate = 0;
if (price > 0) {
capRate = (annualNOI / price) * 100;
}
// 6. Display Results
var cashFlowEl = document.getElementById('res_cashflow');
cashFlowEl.innerText = '$' + monthlyCashFlow.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (monthlyCashFlow >= 0) {
cashFlowEl.className = 'result-value positive';
} else {
cashFlowEl.className = 'result-value negative';
}
document.getElementById('res_coc').innerText = cashOnCash.toFixed(2) + '%';
document.getElementById('res_cap').innerText = capRate.toFixed(2) + '%';
document.getElementById('res_noi').innerText = '$' + annualNOI.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('res_cash_needed').innerText = '$' + totalCashInvested.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
var totalMonthlyExpensesWithMortgage = totalMonthlyFixedExpenses + monthlyMortgage;
document.getElementById('res_expenses').innerText = '$' + totalMonthlyExpensesWithMortgage.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
// Show results
document.getElementById('resultsArea').style.display = 'block';
}
Understanding Rental Property Analysis
Investing in real estate is a numbers game. Whether you are looking at a single-family home, a duplex, or a multi-unit apartment complex, knowing how to accurately calculate your returns is the difference between a profitable investment and a financial burden. This calculator helps you determine the viability of a rental property by analyzing key metrics like Cash Flow, Cash on Cash Return (CoC), and Cap Rate.
What is Cash on Cash Return?
Cash on Cash Return is perhaps the most important metric for rental property investors. It measures the annual return you made on the actual cash you invested, expressed as a percentage.
Formula:
Cash on Cash Return = (Annual Pre-Tax Cash Flow / Total Cash Invested) × 100%
For example, if you buy a $200,000 property with a $40,000 down payment and $5,000 in closing costs, your total cash invested is $45,000. If the property generates $3,000 in positive cash flow per year after all expenses and mortgage payments, your Cash on Cash Return is ($3,000 / $45,000) = 6.6%.
Cap Rate vs. Cash on Cash Return
Many new investors confuse the Capitalization Rate (Cap Rate) with Cash on Cash Return, but they serve different purposes:
- Cap Rate: Measures the natural rate of return of the property assuming you bought it in all cash. It helps compare the profitability of different properties regardless of financing. Calculated as NOI / Purchase Price.
- Cash on Cash Return: Measures the return on your specific equity investment. It takes into account your financing (mortgage) leverage.
How to Calculate Net Operating Income (NOI)
Net Operating Income is the total income the property generates minus all operating expenses. Crucially, NOI does not include mortgage payments (debt service).
Common operating expenses to include in your calculation:
- Property Taxes and Insurance
- Maintenance and Repairs (typically estimated at 5-10% of rent)
- Property Management Fees (typically 8-10% of rent)
- Vacancy Allowance (money set aside for when the unit is empty)
- HOA Fees and Utilities paid by the owner
What is a "Good" Return?
While target returns vary by investor strategy and location, many real estate investors aim for a Cash on Cash Return of 8% to 12%. In highly appreciating markets, investors might accept a lower cash flow return (e.g., 4-6%) in exchange for long-term equity growth. Conversely, in stable markets with little appreciation, investors often demand higher cash flow yields (10%+).
Using the Calculator
To get the most accurate results, ensure you estimate expenses conservatively. It is better to overestimate maintenance costs and vacancy rates than to be surprised by unexpected bills. Use the inputs above to adjust the Down Payment and Interest Rate to see how leverage affects your overall returns.