Calculate ROI Real Estate
Calculate returns for residential rentals, commercial buildings, flips, and REITs using the right metrics for each property type.
How the Calculate ROI Real Estate works
Choose your property type and enter the numbers. Get cash flow, cap rate, or flip returns depending on whether you’re renting, buying commercial, or flipping.
Different property types need different calculations. This calculator adapts to your investment-rental, commercial, or flip-giving you the metrics that matter for your situation.
How it works
Tutorial
Real estate ROI calculations vary by property type. Rental properties focus on monthly cash flow, commercial properties use cap rates and net operating income, while fix-and-flip projects measure profit margin. This guide covers residential rental ROI-the most common investment type.
You can use the calculator above for instant results, or follow this guide to calculate rental property ROI manually.
The Formula
| Metric | Formula |
|---|---|
| Cash Invested | Down Payment + Closing Costs + Repairs |
| Annual Cash Flow | Rental Income – All Expenses – Mortgage |
| ROI Percentage | (Annual Cash Flow ÷ Cash Invested) × 100 |
Step-by-Step Calculation
Here’s a complete rental property ROI calculation.
Step 1: Calculate Total Cash Invested
Add up everything you paid upfront:
| Investment Item | Amount |
|---|---|
| Down Payment (20% of $300,000) | $60,000 |
| Closing Costs | $9,000 |
| Initial Repairs | $15,000 |
| Total Cash Invested | $84,000 |
Calculation:$60,000 + $9,000 + $15,000 =$84,000
Step 2: Calculate Annual Cash Flow
Figure out what’s left each year after all expenses:
| Item | Amount |
|---|---|
| Annual Rental Income | $36,000 |
| Property Tax | -$4,200 |
| Insurance | -$1,800 |
| Maintenance | -$2,700 |
| Property Management | -$2,100 |
| Mortgage Payments | -$16,200 |
| Annual Cash Flow | $9,000 |
Calculation:$36,000 – $4,200 – $1,800 – $2,700 – $2,100 – $16,200 =$9,000
Step 3: Calculate ROI
Divide your annual cash flow by your investment:
| Step | Calculation | Result |
|---|---|---|
| Divide cash flow by investment | $9,000 ÷ $84,000 | 0.1071 |
| Convert to percentage | 0.1071 × 100 | 10.71% |
Final Answer:Your rental property ROI is10.71%
What This Means
A 10.71% cash return on your $84,000 investment means you earn $9,000 per year from rent after all expenses. This doesn’t include property value growth (usually 3-5% per year) or the mortgage principal you pay down each year (worth about $2,000-$3,000 annually). When you add these, your total annual return is closer to 16-19%.
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