Rental Property ROI Calculator
Analyze the return on investment for a rental property. Enter your numbers below to instantly see cash flow, cap rate, cash-on-cash return, and a 5-year total ROI projection.
How It Works
This calculator uses standard real estate investment formulas to evaluate a rental property's profitability.
Monthly Cash Flow
Cash flow is the net income after all expenses are subtracted from collected rent.
Collected rent accounts for the vacancy rate — the expected percentage of time the unit sits empty. Maintenance is charged on gross rent, while the property management fee is charged on the collected (occupied) rent.
Cap Rate
Capitalization rate measures the property's unleveraged return. It excludes financing.
NOI (Net Operating Income) = Effective Gross Income - Operating Expenses (no mortgage).
Cash-on-Cash Return
This measures the return on the actual cash you invest (down payment + closing + renovation).
5-Year Total ROI
Projects your total return over a 5-year hold, including equity gain (appreciation + principal paydown) and cumulative cash flow, relative to your initial cash investment. For the projection, rent and maintenance are assumed to grow at the same annual rate as the property's appreciation.
Break-Even Rent
The minimum monthly rent needed to achieve zero cash flow (all expenses covered).
Frequently Asked Questions
What is a good ROI for a rental property?
A cash-on-cash return of 8-12% is generally considered strong, though this varies significantly by market. Cap rates of 5-10% are typical for residential rental properties. These are common industry benchmarks, not guarantees, and vary by market.
How is cap rate different from cash-on-cash return?
Cap rate ignores financing and evaluates the property on its own merits. Cash-on-cash accounts for your specific mortgage and measures the return on your actual cash invested.
Why include a vacancy rate?
No rental property is occupied 100% of the time. A 5-8% vacancy rate is standard for most markets and ensures your analysis is realistic.
Should I manage the property myself?
If you plan to hire a property manager, include that cost (typically 8-12% of collected rent). If you self-manage, set this to 0% but consider the value of your time.
Cash on Cash Return Calculator
Rental ROI projects five years; cash-on-cash focuses on the annual income your invested cash generates. Investors watch it to compare deals that need different down payments. Screen potential properties and stress your assumptions before you commit.
Cash on Cash Return Calculator — read more