Real Estate ROI Calculator
Estimate the yearly return of a rental property bought with cash: net rent after expenses and vacancy, against the total you paid.
Type any value — results update as you type.
How rental property ROI is calculated
This is the ROI of a cash purchase: the net income the property produces in a year, divided by everything you paid to buy it and make it rentable.
Example
A flat costs 250,000 plus 15,000 in fees and renovation. It rents for 1,800 a month, sits empty 5% of the year, and costs 450 a month in tax, insurance, upkeep and management. Net income: 1,800 × 12 × 95% − 450 × 12 = 15,120 a year, so ROI = 15,120 ÷ 265,000 × 100 = 5.71%.
ROI vs. cap rate
The cap rate divides net income by the purchase price alone, without closing and renovation costs. It is used to compare properties on the market; ROI tells you the return on all the money you actually put in.
What this calculator leaves out
- Mortgage — with a loan, the return on your own cash (cash-on-cash return) can be higher, but interest reduces net income.
- Price changes — appreciation or depreciation of the property is not included.
- Income tax — results are before tax on rental income.
Frequently asked questions
What is a good ROI on a rental property?
Many investors look for a net yearly return of 5–10% on a cash purchase, but it depends heavily on the local market and risk.
What expenses should I include?
Property tax, insurance, maintenance and repairs, management fees, service charges and any utilities you pay as the landlord.
How do I estimate vacancy?
Use the share of the year the property is likely to stand empty between tenants. 5% is roughly 2.5 weeks a year.