Rental Property ROI Calculator
Estimate the full return on a rental property — NOI, annual cash flow, cash-on-cash return and total ROI including appreciation and net sale proceeds. Operating expenses, debt service and capital costs are kept separate so mortgage principal is never double-counted.
Written by the CalcBundle Research & Editorial Team · Reviewed by the Quality Review Team · Transparent formulas · results are estimates, not advice. · Updated
Total ROI
Enter a purchase price and your cash invested (down payment, closing, renovation).
What is rental property ROI?
Rental property ROI (return on investment) measures how much you earn relative to the cash you put in. A complete view combines two things most quick calculators miss: the cash flow you collect each year and the profit you realise when you sell. This calculator brings both together into a total ROI and an annualized ROI.
How the calculation works
- NOI = vacancy-adjusted annual rent − annual operating expenses
- Annual cash flow = NOI − annual debt service (your mortgage payment)
- Cash invested = down payment + closing costs + renovation
- Cash-on-cash = annual cash flow ÷ cash invested
- Sale proceeds = projected value − selling costs − remaining loan balance
- Total profit = cumulative cash flow + sale proceeds − cash invested
Operating expenses vs debt service vs capital costs
Keeping these separate is what makes the result trustworthy. Property tax, insurance, maintenance, management and HOA are operating expenses and feed NOI. Your mortgage payment is debt service — its principal portion builds equity, so it is not an expense. Closing and renovation costs are capital you invested up front, not annual costs.
Worked example
Imagine a $300,000 rental bought with $60,000 down plus $6,000 in closing and starter repairs, so $66,000 is invested. Vacancy-adjusted rent nets an NOI of, say, $18,000 a year; the mortgage costs about $14,400, leaving $3,600 of annual cash flow — a cash-on-cash return of roughly 5.5%. Now hold five years with modest appreciation: the property is worth more, you have paid the loan down, and after selling costs your net sale proceeds add tens of thousands to the cumulative cash flow. Total profit divided by the $66,000 invested is the total ROI, and expressing it per year gives the annualized figure — the number that reveals whether the deal beat the alternatives.
Why the “full return” view matters
Many rentals show unremarkable cash-on-cash returns yet prove to be excellent investments, because the bulk of the gain arrives quietly as appreciation and loan paydown and only appears at sale. Judging such a property on its first-year cash flow alone would reject a good deal; judging it on appreciation alone would flatter a bad one. Combining both — as this calculator does — is the only way to see a rental for what it really is over a full hold.
Related calculators
Drill into a single metric with the cash-on-cash return calculator, cap rate calculator or property cash flow calculator; confirm the loan is safe with the DSCR calculator; and compare the headline number with the broader real estate ROI calculator.
Frequently asked questions
What is a good ROI on a rental property?
It depends on your market and risk tolerance, but many investors target a cash-on-cash return of 8% or more and a total ROI that comfortably beats safer alternatives. Compare the estimate here against local deals rather than a fixed benchmark.
Does this calculator include the mortgage?
Yes. It reuses the same amortization math as our loan calculators to work out your monthly payment, treats the payment as debt service (not an operating expense), and subtracts the remaining loan balance from your sale proceeds so principal is never double-counted.
What is the difference between cash-on-cash return and total ROI?
Cash-on-cash return measures your annual pre-tax cash flow against the cash you invested. Total ROI also includes appreciation and net proceeds when you sell, so it reflects the full return over your holding period.
Are the results guaranteed?
No. Every figure is an estimate based on your inputs and assumptions such as appreciation and vacancy. Property values, rents and costs change, so treat the results as planning estimates, not financial advice.
Which inputs change the ROI the most?
Usually the purchase price, the rent, and the appreciation assumption. Because ROI is measured against your cash invested, the down payment and closing costs also swing it. It is worth running the calculator twice — once with your best guess and once with conservative rent and appreciation — to see how much the deal depends on optimism.
How do vacancy and maintenance affect the return?
More than most people expect. A property that looks strongly positive when fully let can turn marginal once you allow for a few weeks of vacancy a year and set aside reserves for repairs and capital items. Entering a realistic vacancy rate and full operating costs is what separates a durable ROI estimate from a hopeful one.
Does the ROI include tax benefits like depreciation?
No. This is a pre-tax estimate. In many jurisdictions rental property also offers depreciation and other deductions that improve the after-tax return, but those depend on your situation and local rules, so they are left out here to keep the comparison clean.
Related calculators
Cash-on-Cash Return
Measure annual pre-tax cash flow against the cash you actually invested.
Cap Rate
Compute capitalization rate from NOI and value, or solve for value or NOI.
Property Cash Flow
Estimate monthly and annual rental cash flow after expenses and mortgage.
Real Estate ROI
Combine cash flow, appreciation and sale into total ROI on cash invested.
Rental Yield
Work out gross and net rental yield, or the rent needed for a target yield.
Disclaimer. This calculator provides estimates for informational purposes only. Results are based on the information you enter and the assumptions used by the calculator. Actual financial, tax, business valuation, lending, marketplace or investment outcomes may differ. Consider consulting a qualified professional for decisions involving significant amounts of money. Results are estimates based on your inputs and assumptions. Appreciation and rents are not guaranteed. This is not financial or investment advice.