Calculating ROI for Property Flips
Property flipping needs different calculations than rentals. Figure out true returns including holding costs, renovation expenses, and time value of money for fix-and-flip deals.
How the Calculating ROI for Property Flips works
Enter purchase price, renovation budget, timeline, after-repair value, and all carrying costs. Get total ROI, yearly returns, break-even price, and maximum renovation spend to keep target returns.
Flippers often forget time and holding costs, turning profits into losses. This calculator includes everything: interest, utilities, taxes, and opportunity cost. Know your real returns before you start.
How it works
Tutorial
Property flipping ROI is completely different from rental calculations because time matters enormously. A 20% return in 6 months beats a 20% return in 2 years, but many flippers forget to include holding costs, loan expenses, and opportunity costs that eat profits.
You can use the calculator above to analyze your flip with all costs included, or follow this manual guide to understand how true flip ROI accounts for time and hidden expenses.
The Formula
| Component | Formula |
|---|---|
| Total Investment | Purchase + Renovation + Holding + Financing |
| Net Profit | Sale Price – Total Investment – Selling Costs |
| ROI Percentage | (Net Profit ÷ Total Investment) × 100 |
Step-by-Step Calculation
Here’s a complete flip analysis with all costs included.
Step 1: Calculate Total Investment
Include every dollar spent during the project:
| Expense | Amount |
|---|---|
| Purchase Price | $150,000 |
| Renovation Costs | $35,000 |
| Holding Costs (6 months) | $6,000 |
| Loan Costs | $4,000 |
| Total Investment | $195,000 |
Calculation:$150,000 + $35,000 + $6,000 + $4,000 =$195,000
Step 2: Calculate Net Profit
Subtract all costs from sale price:
| Item | Amount |
|---|---|
| Sale Price | $240,000 |
| Selling Costs (6%) | -$14,400 |
| Total Investment | -$195,000 |
| Net Profit | $30,600 |
Calculation:$240,000 – $14,400 – $195,000 =$30,600
Step 3: Calculate ROI Percentage
Divide profit by investment:
| Step | Calculation | Result |
|---|---|---|
| Divide profit by investment | $30,600 ÷ $195,000 | 0.1569 |
| Convert to percentage | 0.1569 × 100 | 15.69% |
Final Answer:Your property flip ROI is15.69%
What This Means
A 15.69% return in 6 months is excellent, equal to a yearly return over 30%. However, this assumes everything goes perfectly-budget overruns, market changes, or longer holding times can quickly turn profits into losses.
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