Rental Property ROI Calculator
Calculate cash-on-cash return, cap rate, and total ROI for rental property investments.
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ROI Results
About This Calculator
Calculate rental property ROI including cash-on-cash return, cap rate, total return with appreciation, and cash flow analysis. Evaluate investment properties with comprehensive expense modeling.
Frequently Asked Questions
What is cash-on-cash return?
Cash-on-cash return measures the annual pre-tax cash flow relative to the total cash invested. It shows the actual return on your out-of-pocket investment.
How do you calculate rental property ROI?
ROI = (Annual Cash Flow + Appreciation + Equity Buildup) / Total Investment. This calculator factors in all income and expenses including mortgage payments.
What is a good ROI for rental property?
A good cash-on-cash return is typically 8-12%. However, this varies by market, property type, and investment strategy.
What ROI metrics should I use to evaluate a rental property?
Cash-on-Cash Return measures annual cash flow divided by total cash invested: if you invested $80,000 and generate $6,400/year in net cash flow, your cash-on-cash return is 8%. Cap Rate is NOI divided by property value: a property with $24,000 NOI valued at $320,000 has a 7.5% cap rate. In 2025, residential cap rates range from 4-8%. Total ROI includes appreciation, mortgage paydown, and tax benefits in addition to cash flow. A property with modest 5% cash-on-cash return might deliver 15-18% total annualized ROI when all factors are included. Many investors target the 1% rule: monthly rent should equal at least 1% of purchase price ($200,000 property should rent for $2,000+), though this benchmark is difficult in expensive markets.
What expenses do new landlords typically underestimate?
Vacancy loss is often the biggest surprise: budget 5-8% (roughly 3-4 weeks per year per unit). Property management fees run 8-12% of collected rent plus one month's rent for tenant placement. Maintenance and CapEx reserves are frequently underestimated: budget 1% of property value annually for routine maintenance and separately 1-2% for CapEx (roof, HVAC, water heater, appliances). A $250,000 property should have $2,500/year in maintenance and $2,500-$5,000/year in CapEx reserves. Landlord insurance costs more than standard homeowner's — expect $1,200-$2,500/year. In 2025, rising property taxes and insurance costs in states like Florida and Texas have significantly compressed margins. A thorough model should include: mortgage, taxes, insurance, management, vacancy, maintenance, CapEx, utilities, and accounting costs.
Alex specializes in personal finance modeling with experience in investment analysis and tax optimization. He ensures every financial calculator follows current IRS guidelines and industry-standard formulas.
- CFA Level II Candidate
- B.S. in Finance, University of Michigan
- 8 years in financial planning tools