ROI Rental Property Calculator
Calculate complete returns from rental property investments including cash flow, appreciation, and tax benefits.
How the ROI Rental Property Calculator works
Analyze rental income, expenses, mortgage costs, property appreciation, and tax advantages to determine total investment returns.
See the full picture of rental property profits beyond just monthly rent to make smarter investment decisions.
How it works
Tutorial
Rental properties make money in four ways: monthly rent profits, property value increases, loan paydown by tenants, and tax write-offs. Most people only look at monthly rent, but that’s just part of your return. This complete approach shows the real profit potential.
Use the calculator above for instant analysis, or follow the steps below to calculate it yourself.
The Formula
| Component | Formula |
|---|---|
| Total Investment | Down Payment + Closing Costs + Initial Repairs |
| Annual Cash Flow | Rental Income – Operating Expenses – Debt Service |
| Cash-on-Cash ROI | (Annual Cash Flow ÷ Total Investment) × 100 |
| Total ROI | Cash Flow + Appreciation + Principal + Tax Benefits |
Step-by-Step Calculation
Let’s analyze a complete rental property investment.
Step 1: Calculate Your Total Cash Investment
Add up all money you’re putting in:
| Investment Item | Amount |
|---|---|
| Purchase Price | $300,000 |
| Down Payment (20%) | $60,000 |
| Closing Costs | $9,000 |
| Initial Repairs | $11,000 |
| Total Cash Invested | $80,000 |
Calculation:$60,000 + $9,000 + $11,000 =$80,000
Step 2: Calculate Annual Cash Flow
Determine actual cash you receive each year:
| Item | Monthly | Annual |
|---|---|---|
| Rental Income | $2,400 | $28,800 |
| Property Tax | -$350 | -$4,200 |
| Insurance | -$125 | -$1,500 |
| Maintenance (8%) | -$192 | -$2,304 |
| Vacancy (5%) | -$120 | -$1,440 |
| Property Management | -$192 | -$2,304 |
| Mortgage Payment | -$1,146 | -$13,752 |
| Annual Cash Flow | $275 | $3,300 |
Calculation:$28,800 – $4,200 – $1,500 – $2,304 – $1,440 – $2,304 – $13,752 =$3,300
Step 3: Calculate Cash-on-Cash ROI
Show your return on invested dollars:
| Step | Calculation | Result |
|---|---|---|
| Divide cash flow by investment | $3,300 ÷ $80,000 | 0.04125 |
| Convert to percentage | 0.04125 × 100 | 4.13% |
Step 4: Add Additional Return Components
Include appreciation, principal paydown, and tax benefits:
| Return Component | Annual Amount |
|---|---|
| Cash Flow | $3,300 |
| Appreciation (3%) | $9,000 |
| Principal Reduction | $3,600 |
| Tax Savings | $2,100 |
| Total Annual Return | $18,000 |
Calculation:$3,300 + $9,000 + $3,600 + $2,100 =$18,000
Step 5: Calculate Total ROI
Divide total returns by your investment:
| Step | Calculation | Result |
|---|---|---|
| Divide total return by investment | $18,000 ÷ $80,000 | 0.225 |
| Convert to percentage | 0.225 × 100 | 22.5% |
Final Answer:Your cash-on-cash ROI is4.13%but your total ROI is22.5%
What This Means
While 4.13% cash flow seems modest, the 22.5% total return reveals the real power. Property value increases, tenant-paid loan reduction, and tax benefits multiply your returns significantly beyond just monthly rent.
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