How the Real Estate ROI Calculator works
Estimate rental property return on investment. Adjust the inputs above, then use the calculate button to generate a fresh estimate based on the numbers you entered.
The result is designed to give you a quick planning number, plus a short breakdown of the major figures behind it. You can reset the form at any time and try a different scenario.
When to use this calculator
Use this real estate ROI calculator to estimate return from a rental or investment property. It is useful for combining cash flow, appreciation and upfront cash invested into a simple return estimate.
Formula
ROI = annual return / cash invested
- Cash invested includes down payment plus closing or setup costs.
- Annual cash flow is the estimated income after expenses and debt service.
- Appreciation estimates annual property value growth.
Worked example
For a $550,000 property with $110,000 down, $15,000 closing costs, $6,000 annual cash flow and 3% appreciation, the calculator estimates annual return and ROI.
Common mistakes
- Counting appreciation as guaranteed.
- Ignoring vacancies, repairs and financing changes.
- Comparing ROI without considering risk, liquidity and time required.
FAQs
Is appreciation included in ROI?
Yes, this estimate includes appreciation based on the rate entered, but actual property values can move differently.
What is cash-on-cash return?
It compares annual cash flow with the cash you invested upfront.
Should I include closing costs?
Yes. Closing and setup costs increase the cash invested and can lower the return percentage.