Use this calculator to estimate the potential profitability of a rental property investment. Input your property's financial details to see projected monthly cash flow, capitalization rate, and cash-on-cash return.
Property Investment Details
Income Details
Monthly Expenses
Calculation Results
Gross Monthly Rent:
Monthly Vacancy Loss:
Effective Gross Income (Monthly):
Total Monthly Operating Expenses:
Net Monthly Operating Income (NOI):
Monthly Loan Payment (P&I):
Monthly Cash Flow:
Annual Cash Flow:
Capitalization Rate (Cap Rate):
Cash-on-Cash Return:
.rental-income-calculator {
font-family: 'Segoe UI', Tahoma, Geneva, Verdana, sans-serif;
max-width: 700px;
margin: 20px auto;
padding: 25px;
border: 1px solid #e0e0e0;
border-radius: 10px;
background-color: #f9f9f9;
box-shadow: 0 4px 12px rgba(0, 0, 0, 0.08);
}
.rental-income-calculator h2 {
color: #2c3e50;
text-align: center;
margin-bottom: 20px;
font-size: 1.8em;
}
.rental-income-calculator h3 {
color: #34495e;
margin-top: 25px;
margin-bottom: 15px;
border-bottom: 1px solid #eee;
padding-bottom: 5px;
font-size: 1.3em;
}
.calculator-inputs label {
display: inline-block;
width: 60%;
margin-bottom: 8px;
font-weight: bold;
color: #555;
}
.calculator-inputs input[type="number"] {
width: 35%;
padding: 10px;
margin-bottom: 15px;
border: 1px solid #ccc;
border-radius: 5px;
box-sizing: border-box;
font-size: 1em;
}
.calculator-inputs button {
display: block;
width: 100%;
padding: 12px 20px;
margin-top: 20px;
background-color: #28a745;
color: white;
border: none;
border-radius: 5px;
font-size: 1.1em;
cursor: pointer;
transition: background-color 0.3s ease;
}
.calculator-inputs button:hover {
background-color: #218838;
}
.calculator-results {
margin-top: 30px;
padding-top: 20px;
border-top: 1px solid #e0e0e0;
}
.calculator-results p {
margin-bottom: 10px;
font-size: 1.1em;
color: #333;
display: flex;
justify-content: space-between;
align-items: center;
}
.calculator-results p strong {
color: #2c3e50;
flex-basis: 70%;
}
.calculator-results span {
font-weight: normal;
color: #007bff;
flex-basis: 30%;
text-align: right;
}
.calculator-results span#monthlyCashFlowOutput {
font-weight: bold;
color: #28a745; /* Green for positive cash flow */
}
.calculator-results span#monthlyCashFlowOutput:empty {
color: #dc3545; /* Red for negative cash flow, if applicable */
}
.calculator-results span#annualCashFlowOutput {
font-weight: bold;
color: #28a745; /* Green for positive cash flow */
}
.calculator-results span#annualCashFlowOutput:empty {
color: #dc3545; /* Red for negative cash flow, if applicable */
}
function calculateRentalIncome() {
// Get input values
var purchasePrice = parseFloat(document.getElementById('purchasePrice').value);
var downPayment = parseFloat(document.getElementById('downPayment').value);
var loanInterestRate = parseFloat(document.getElementById('loanInterestRate').value);
var loanTermYears = parseFloat(document.getElementById('loanTermYears').value);
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value);
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value);
var annualPropertyTaxes = parseFloat(document.getElementById('annualPropertyTaxes').value);
var annualPropertyInsurance = parseFloat(document.getElementById('annualPropertyInsurance').value);
var annualMaintenance = parseFloat(document.getElementById('annualMaintenance').value);
var propertyManagementFee = parseFloat(document.getElementById('propertyManagementFee').value);
var otherMonthlyExpenses = parseFloat(document.getElementById('otherMonthlyExpenses').value);
// Validate inputs
if (isNaN(purchasePrice) || isNaN(downPayment) || isNaN(loanInterestRate) || isNaN(loanTermYears) ||
isNaN(monthlyRent) || isNaN(vacancyRate) || isNaN(annualPropertyTaxes) ||
isNaN(annualPropertyInsurance) || isNaN(annualMaintenance) || isNaN(propertyManagementFee) ||
isNaN(otherMonthlyExpenses)) {
alert('Please enter valid numbers for all fields.');
return;
}
// Ensure non-negative values for relevant inputs
purchasePrice = Math.max(0, purchasePrice);
downPayment = Math.max(0, downPayment);
loanInterestRate = Math.max(0, loanInterestRate);
loanTermYears = Math.max(1, loanTermYears); // Loan term must be at least 1 year
monthlyRent = Math.max(0, monthlyRent);
vacancyRate = Math.max(0, Math.min(100, vacancyRate)); // Vacancy rate between 0-100%
annualPropertyTaxes = Math.max(0, annualPropertyTaxes);
annualPropertyInsurance = Math.max(0, annualPropertyInsurance);
annualMaintenance = Math.max(0, annualMaintenance);
propertyManagementFee = Math.max(0, Math.min(100, propertyManagementFee)); // Management fee between 0-100%
otherMonthlyExpenses = Math.max(0, otherMonthlyExpenses);
// 1. Gross Monthly Rent
var grossMonthlyRent = monthlyRent;
// 2. Monthly Vacancy Loss
var monthlyVacancyLoss = grossMonthlyRent * (vacancyRate / 100);
// 3. Effective Gross Income (Monthly)
var effectiveGrossIncome = grossMonthlyRent – monthlyVacancyLoss;
// 4. Total Monthly Operating Expenses
var monthlyPropertyTaxes = annualPropertyTaxes / 12;
var monthlyPropertyInsurance = annualPropertyInsurance / 12;
var monthlyMaintenance = annualMaintenance / 12;
var monthlyPropertyManagementFee = grossMonthlyRent * (propertyManagementFee / 100);
var totalMonthlyOperatingExpenses = monthlyPropertyTaxes + monthlyPropertyInsurance + monthlyMaintenance + monthlyPropertyManagementFee + otherMonthlyExpenses;
// 5. Net Monthly Operating Income (NOI)
var netOperatingIncome = effectiveGrossIncome – totalMonthlyOperatingExpenses;
// 6. Monthly Loan Payment (P&I)
var monthlyLoanPayment = 0;
var loanAmount = purchasePrice – downPayment;
if (loanAmount > 0 && loanInterestRate > 0 && loanTermYears > 0) {
var monthlyInterestRate = (loanInterestRate / 100) / 12;
var numberOfPayments = loanTermYears * 12;
// P = L[c(1 + c)^n] / [(1 + c)^n – 1]
monthlyLoanPayment = loanAmount * (monthlyInterestRate * Math.pow((1 + monthlyInterestRate), numberOfPayments)) / (Math.pow((1 + monthlyInterestRate), numberOfPayments) – 1);
} else if (loanAmount > 0 && loanInterestRate === 0 && loanTermYears > 0) {
// Handle 0 interest rate for loan, simple division
monthlyLoanPayment = loanAmount / (loanTermYears * 12);
}
// 7. Monthly Cash Flow
var monthlyCashFlow = netOperatingIncome – monthlyLoanPayment;
// 8. Annual Cash Flow
var annualCashFlow = monthlyCashFlow * 12;
// 9. Capitalization Rate (Cap Rate)
var capRate = 0;
if (purchasePrice > 0) {
capRate = (netOperatingIncome * 12 / purchasePrice) * 100;
}
// 10. Cash-on-Cash Return
var cashOnCashReturn = 0;
if (downPayment > 0) {
cashOnCashReturn = (annualCashFlow / downPayment) * 100;
} else if (loanAmount === 0 && purchasePrice > 0) { // All cash purchase
cashOnCashReturn = (annualCashFlow / purchasePrice) * 100;
}
// Display results
document.getElementById('grossMonthlyRentOutput').innerHTML = '$' + grossMonthlyRent.toFixed(2);
document.getElementById('monthlyVacancyLossOutput').innerHTML = '$' + monthlyVacancyLoss.toFixed(2);
document.getElementById('effectiveGrossIncomeOutput').innerHTML = '$' + effectiveGrossIncome.toFixed(2);
document.getElementById('totalMonthlyExpensesOutput').innerHTML = '$' + totalMonthlyOperatingExpenses.toFixed(2);
document.getElementById('netOperatingIncomeOutput').innerHTML = '$' + netOperatingIncome.toFixed(2);
document.getElementById('monthlyLoanPaymentOutput').innerHTML = '$' + monthlyLoanPayment.toFixed(2);
document.getElementById('monthlyCashFlowOutput').innerHTML = '$' + monthlyCashFlow.toFixed(2);
document.getElementById('annualCashFlowOutput').innerHTML = '$' + annualCashFlow.toFixed(2);
document.getElementById('capRateOutput').innerHTML = capRate.toFixed(2) + '%';
document.getElementById('cashOnCashReturnOutput').innerHTML = cashOnCashReturn.toFixed(2) + '%';
// Apply color based on cash flow
var monthlyCashFlowElement = document.getElementById('monthlyCashFlowOutput');
var annualCashFlowElement = document.getElementById('annualCashFlowOutput');
if (monthlyCashFlow < 0) {
monthlyCashFlowElement.style.color = '#dc3545'; // Red
} else {
monthlyCashFlowElement.style.color = '#28a745'; // Green
}
if (annualCashFlow < 0) {
annualCashFlowElement.style.color = '#dc3545'; // Red
} else {
annualCashFlowElement.style.color = '#28a745'; // Green
}
}
// Calculate on page load with default values
window.onload = calculateRentalIncome;
Understanding Rental Property Income and Profitability
Investing in rental properties can be a lucrative way to build wealth, but it requires careful financial planning and a clear understanding of potential income and expenses. A rental income calculator is an essential tool for prospective and current landlords to assess the financial viability of an investment.
What is Rental Income?
Rental income refers to the money collected from tenants for the use of a property. However, simply knowing the monthly rent isn't enough to determine profitability. A comprehensive analysis involves accounting for all income streams and, crucially, all associated expenses.
Key Components of Rental Property Analysis
1. Property Investment Details
Property Purchase Price: The total cost to acquire the property. This is the foundation of your investment.
Down Payment Amount: The initial cash you put towards the purchase. This directly impacts your loan amount and cash-on-cash return.
Loan Interest Rate (Annual %): The annual percentage rate charged on your mortgage loan. A higher rate means higher monthly payments.
Loan Term (Years): The duration over which you will repay the loan, typically 15 or 30 years. A longer term usually means lower monthly payments but more interest paid over time.
2. Income Details
Monthly Rent Income: The amount you expect to collect from tenants each month. Researching comparable properties in the area is crucial for setting a realistic rent.
Vacancy Rate (Annual %): The percentage of time your property is expected to be vacant and not generating rent. Even in strong markets, a small vacancy rate (e.g., 3-5%) should be factored in for tenant turnover, repairs, or market fluctuations.
3. Monthly Expenses
These are the ongoing costs associated with owning and operating a rental property. It's vital to be thorough here, as underestimating expenses can severely impact profitability.
Annual Property Taxes: Taxes levied by local government based on the property's assessed value. These are typically paid annually but should be budgeted monthly.
Annual Property Insurance: Coverage for damages to the property from events like fire, storms, or theft. Landlord insurance is different from homeowner's insurance.
Annual Maintenance & Repairs: Costs for routine upkeep, unexpected repairs (e.g., plumbing leaks, appliance failures), and capital expenditures (e.g., new roof, HVAC). A common rule of thumb is to budget 1% of the property's value annually, or a certain percentage of gross rent.
Property Management Fee (% of Gross Rent): If you hire a property manager, they typically charge a percentage of the collected rent (e.g., 8-12%). This covers tenant screening, rent collection, maintenance coordination, and more.
Other Monthly Expenses: This can include Homeowners Association (HOA) fees, utilities if the landlord pays them (e.g., water, sewer, trash), landscaping, pest control, or advertising costs for new tenants.
Understanding the Calculator's Outputs
The calculator provides several key metrics to help you evaluate your investment:
Gross Monthly Rent: The total rent collected before any deductions.
Monthly Vacancy Loss: The estimated income lost due to periods when the property is vacant.
Effective Gross Income (EGI): Gross rent minus vacancy loss. This is your actual expected income from the property.
Total Monthly Operating Expenses: The sum of all recurring monthly costs to run the property, excluding loan payments.
Net Monthly Operating Income (NOI): EGI minus total monthly operating expenses. This is a crucial figure as it represents the property's income before debt service and taxes.
Monthly Loan Payment (P&I): Your principal and interest payment on the mortgage.
Monthly Cash Flow: NOI minus your monthly loan payment. A positive cash flow means the property generates more income than it costs each month.
Annual Cash Flow: Your monthly cash flow multiplied by 12.
Capitalization Rate (Cap Rate): Calculated as (Annual NOI / Property Purchase Price) * 100. This metric helps compare the profitability of different investment properties by showing the unleveraged rate of return. It's useful for all-cash purchases or comparing properties regardless of financing.
Cash-on-Cash Return: Calculated as (Annual Cash Flow / Down Payment) * 100. This metric measures the annual return on the actual cash invested (your down payment). It's particularly useful for financed properties as it shows how efficiently your invested capital is working.
Example Scenario:
Let's consider a property purchased for $250,000 with a $50,000 down payment. The loan is for $200,000 at 6.5% interest over 30 years. The property rents for $2,000/month, with an estimated 5% vacancy rate. Annual property taxes are $3,000, insurance is $1,200, and maintenance is $1,000. A property manager charges 10% of gross rent, and other monthly expenses are $100.
In this example, the property would have a negative monthly cash flow, indicating it might not be a strong investment under these specific conditions. This highlights the importance of thorough analysis before committing to a purchase.