Rental Property ROI Calculator

How to use the rental property roi calculator

Gross annual rent is reduced by the vacancy allowance. Operating costs include property tax, insurance, maintenance, association fees and management fees on collected rent. Net operating income divided by purchase price gives the cap rate. Subtracting the first year of mortgage payments gives annual cash flow. Cash-on-cash return divides that cash flow by the down payment, closing costs and initial repairs combined.

Why are cap rate and cash-on-cash return different?

Cap rate excludes financing, making it an operating-income measure relative to property price. Cash-on-cash return reflects debt service and your cash invested. Principal repayment is shown separately because it builds equity but is not cash available to spend.

Is this the full investment return?

No. Appreciation, selling costs, capital gains and income taxes are excluded. The model describes the first year using your assumptions, not a market valuation or a prediction of future occupancy.

How should I compare scenarios?

Start with the example, then replace every relevant value with your own figures. Keep the currency and time periods consistent. Change one assumption at a time and calculate again to see its effect. The initial values are examples, not recommended rates, prices or budgets. When comparing alternatives, include the same categories in each scenario so that a missing expense does not make one choice appear cheaper.

Can I save or share the result?

Use Copy summary for a concise text result, or Export CSV for the available figures. Calculations run in your browser; entered amounts are not uploaded by this tool. An exported file contains your information, so choose where to store or share it. Displayed amounts are rounded to two decimal places, while most intermediate calculations retain additional precision. Small differences from a bill or statement can therefore occur.

What should I check before using the numbers?

Read the calculation assumptions beside the result and confirm the inputs against the relevant quote, agreement or records. This tool provides an estimate based on those inputs, not an approval, market forecast or personalized financial recommendation. Refresh the calculation when your circumstances or the underlying terms change.