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Rental Property ROI & Cash Flow Calculator

Purchase Details

30 Years 15 Years 10 Years

Monthly Financials

Monthly Cash Flow

$0.00

Cash on Cash Return

0.00%

Cap Rate

0.00%

Monthly Mortgage (P&I)

$0.00

Net Operating Income (Annual):

Total Initial Investment:

function calculateRentalROI() { var price = parseFloat(document.getElementById('purchasePrice').value) || 0; var downPercent = parseFloat(document.getElementById('downPaymentPercent').value) || 0; var rate = parseFloat(document.getElementById('interestRate').value) || 0; var term = parseFloat(document.getElementById('loanTerm').value) || 30; var rent = parseFloat(document.getElementById('monthlyRent').value) || 0; var taxes = parseFloat(document.getElementById('propertyTaxes').value) || 0; var insurance = parseFloat(document.getElementById('insurance').value) || 0; var expPercent = parseFloat(document.getElementById('otherExpPercent').value) || 0; // Calculations var downPayment = price * (downPercent / 100); var loanAmount = price – downPayment; var monthlyRate = (rate / 100) / 12; var numPayments = term * 12; // Mortgage P&I var monthlyMortgage = 0; if (rate > 0) { monthlyMortgage = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numPayments)) / (Math.pow(1 + monthlyRate, numPayments) – 1); } else { monthlyMortgage = loanAmount / numPayments; } // Monthly Expenses var monthlyTaxes = taxes / 12; var monthlyInsurance = insurance / 12; var monthlyMaintVac = rent * (expPercent / 100); var totalMonthlyExpenses = monthlyMortgage + monthlyTaxes + monthlyInsurance + monthlyMaintVac; // ROI Metrics var monthlyCashFlow = rent – totalMonthlyExpenses; var annualCashFlow = monthlyCashFlow * 12; var cashOnCash = (annualCashFlow / downPayment) * 100; var annualNOI = (rent * 12) – (taxes + insurance + (monthlyMaintVac * 12)); var capRate = (annualNOI / price) * 100; // Display document.getElementById('roi-results').style.display = 'block'; document.getElementById('resCashFlow').innerText = '$' + monthlyCashFlow.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resCoC').innerText = cashOnCash.toFixed(2) + '%'; document.getElementById('resCapRate').innerText = capRate.toFixed(2) + '%'; document.getElementById('resMortgage').innerText = '$' + monthlyMortgage.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resNOI').innerText = '$' + annualNOI.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resInvestment').innerText = '$' + downPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); if(monthlyCashFlow < 0) { document.getElementById('resCashFlow').style.color = '#e74c3c'; } else { document.getElementById('resCashFlow').style.color = '#2980b9'; } }

How to Calculate Rental Property ROI

Investing in real estate requires a clear understanding of your potential returns. This Rental Property ROI Calculator helps you analyze a property's profitability by breaking down the key financial metrics that professional investors use.

Understanding the Key Metrics

• Monthly Cash Flow: The amount of profit left over after all expenses, including the mortgage, taxes, insurance, and maintenance, have been paid. Positive cash flow is essential for long-term sustainability.
• Cap Rate (Capitalization Rate): Calculated as Net Operating Income (NOI) divided by the Purchase Price. It allows you to compare different properties without considering mortgage financing.
• Cash on Cash Return: This is the ratio of your annual pre-tax cash flow to the total amount of cash invested (usually your down payment). It tells you exactly how hard your liquid cash is working for you.
• Net Operating Income (NOI): The total income generated by the property minus all necessary operating expenses, excluding mortgage payments.

Real Estate ROI Example

Imagine you purchase a single-family home for $300,000 with a 20% down payment ($60,000). At a 6.5% interest rate, your mortgage might be around $1,517. If you rent the property for $2,500 and pay $500 in taxes, insurance, and maintenance, your monthly cash flow would be roughly $483.

In this scenario, your Annual Cash Flow would be $5,796, resulting in a Cash on Cash Return of 9.66%. This provides a much clearer picture of the investment than simply looking at the monthly rent alone.

Pro Tips for Better ROI

1. Account for Vacancy: Never assume 100% occupancy. Always set aside 5-10% of rent for potential vacancies.
2. Maintenance Reserves: Older properties require more upkeep. Budgeting 1% of the property value per year for maintenance is a safe rule of thumb.
3. Location Matters: A lower Cap Rate in a high-demand area might be better than a high Cap Rate in a declining neighborhood due to potential appreciation.