Property ROI Calculator
Analyze rental property investment returns
Last updated: January 2025
About This Tool
The property ROI calculator helps real estate investors analyze the potential returns on rental properties. By factoring in all income and expenses, it calculates key metrics like cash-on-cash return, cap rate, and total ROI to help you make informed investment decisions.
What is Property ROI Calculator?
Property ROI (Return on Investment) measures the profitability of a rental property investment. This calculator computes multiple return metrics including cash-on-cash return (annual cash flow divided by initial investment), cap rate (net operating income divided by property value), and total ROI including appreciation and equity building.
How It Works
Enter the property price, down payment, expected rent, and all operating expenses. The calculator projects annual rental income minus vacancy, operating expenses, and mortgage payments. It then calculates your returns based on cash invested, including the benefits of appreciation and mortgage paydown.
Formula
Cash-on-Cash ROI = Annual Cash Flow / Total Cash Invested x 100; Cap Rate = NOI / Property Price x 100
Property Details
Annual Expenses
Cash-on-Cash
-1.3%
Total ROI
15.5%
Cap Rate
5.8%
Gross Yield
8.4%
Monthly Cash Flow
-$76.96
Income & Expenses
Total Return Breakdown
💡 Benchmarks
- • Cap Rate: 5-10% is good
- • Cash-on-Cash: 8%+ is ideal
- • Price-to-Rent: <15 favors buying
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When to Use This Calculator
- 1When evaluating potential rental property investments
- 2To compare multiple investment properties objectively
- 3When deciding between different financing options
- 4To set appropriate rental rates for profitability
- 5During due diligence before making an offer
Pro Tips
- •Aim for at least 8% cash-on-cash return for rental properties
- •Cap rates of 5-10% are typically considered good
- •Always account for vacancy - 5-10% is realistic
- •The 1% rule: monthly rent should be at least 1% of purchase price
- •Include a reserve for capital expenditures and repairs
Common Mistakes to Avoid
- •Using listed rent instead of actual market rent
- •Underestimating vacancy, repairs, and turnover costs
- •Not factoring in property management fees (8-10%)
- •Ignoring capital expenditure reserves
- •Relying too heavily on appreciation projections