Rental Property ROI Calculator

Annual cash flow after vacancy, operating costs, and mortgage; total profit adds sale proceeds net of loan; ROI uses your down payment as cash invested.

What is rental property ROI?

Short answer: Rental property ROI measures the return generated from a real estate investment relative to its total cost, including cash flow and property appreciation.

Example Rental ROI Calculation

A $300,000 property generating $2,000/month in rent with $800 monthly expenses produces $14,400 annual cash flow. Over 5 years, including appreciation, ROI can exceed 50% depending on financing and market growth.

Inputs

Effective rent = monthly rent × (1 − vacancy). Annual cash flow = effective rent − operating expenses − P&I (all monthly × 12). Total profit = cumulative cash flow + sale proceeds − down payment. Equity gained = ending equity (value − loan balance) − down. Closing costs and sale fees not modeled.

Purchase price ($)

Down payment ($)

Monthly rent ($)

Monthly operating expenses ($)

Vacancy rate (%)

Annual appreciation (%)

Holding period (years)

Mortgage interest rate (% annual)

Loan term (years)

What is ROI in real estate?

Real estate ROI compares total return on your cash invested—typically the down payment—to rent collected, operating costs, loan paydown, and change in property value over your hold.

It is broader than cap rate (income ÷ price) or cash-on-cash (annual cash ÷ cash in) alone; total ROI usually includes sale assumptions.

How do you calculate rental property ROI?

Estimate annual cash flow after vacancy and operating costs minus the mortgage, sum it over the hold, then add sale proceeds net of the remaining loan and subtract your initial cash to get total profit.

Divide total profit by cash invested and multiply by 100 for ROI (%). This calculator automates that path using your rent, expenses, rate, and appreciation inputs.

What is a good ROI for rental property?

Many investors target roughly 8–15% cash-on-cash on leveraged rentals when markets are stable, but “good” depends on risk, leverage, and whether appreciation is conservative.

Compare any outcome to real estate ROI benchmarks and your alternative investments—not to headline numbers that ignore vacancy or capex.

Real Estate ROI hub · Cap rate · Cash-on-cash · Flip ROI · Benchmarks · Legacy tools