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 to Calculate Rental Property ROI
This calculator uses standard real estate investment formulas to evaluate a rental property's profitability.
If you're weighing a quick renovation-and-resale instead of a long-term hold, the fix and flip profit calculator models that exit strategy instead, starting from the same purchase price.
Monthly Cash Flow and Vacancy Rate
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.
Not sure what to enter for that monthly mortgage line? Run your loan amount, rate, and term through the mortgage amortization calculator to get the exact principal-and-interest payment first.
Cap Rate and Net Operating Income
Capitalization rate measures the property's unleveraged return. It excludes financing.
NOI (Net Operating Income) = Effective Gross Income - Operating Expenses (no mortgage).
To dig into cap rate on its own — including the purchase price implied by a target rate — the cap rate calculator breaks it out from every other figure on this page.
Cash-on-Cash Return
This measures the return on the actual cash you invest (down payment + closing + renovation).
For a closer look at this single metric — cap rate and NOI broken out side by side against your actual cash invested — use the cash-on-cash return calculator.
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.
Use this 5-year figure to compare holds, not to decide whether to buy at all — if you are still renting and wondering how long you must stay for buying to beat renting, run the same price through the rent vs buy calculator to find your break-even year first.
Break-Even Rent
The minimum monthly rent needed to achieve zero cash flow (all expenses covered).
Buying to Hold vs. Buying to Refinance Out
This page assumes you keep your original financing for the life of the hold. Some investors instead buy at a discount, rehab, rent the unit, and then refinance against the property's after-repair value to pull most or all of their cash back out — a strategy the BRRRR calculator models directly, including the cash left in the deal after that refinance and the post-refinance monthly cash flow.
Worked Example
The same $350,000 duplex works well to illustrate a full ROI picture: 25% down, $7,000 in closing costs, $15,000 in renovations, $2,400 in monthly rent with a 5% vacancy allowance, $4,200/year in property tax, $1,500/year in insurance, no HOA, 10% maintenance, 8% property management, financed at 6.5% over 30 years, assuming 3%/year appreciation.
Inputs Used
- Purchase Price: $350,000
- Down Payment: 25%
- Closing Costs: $7,000
- Renovation Costs: $15,000
- Monthly Rent: $2,400
- Vacancy Rate: 5%
- Property Tax: $4,200/yr
- Insurance: $1,500/yr
- HOA: $0/mo
- Maintenance: 10% of rent
- Property Management: 8% of rent
- Loan Interest Rate: 6.5%
- Loan Term: 30 years
- Appreciation: 3%/yr
Computed Result
- Monthly Mortgage (P&I): $1,659
- Monthly Cash Flow: $-277
- Annual Cash Flow: $-3,319
- Cap Rate: 4.74%
- Cash-on-Cash Return: -3.03%
- 5-Year Total ROI: 38.02%
- Break-Even Rent: $2,757
How to Read This Result
Cap rates of 5-10% and cash-on-cash returns of 8-12% are common industry benchmarks for rental deals, not guarantees. This property's 4.74% cap rate sits below that range, and its break-even rent — the minimum rent needed to hit zero monthly cash flow — comes out to $2,757, above the $2,400 monthly rent used here. That gap is exactly why the monthly cash flow above is negative. Raise the rent input toward the break-even figure to see the cash flow turn positive.
Rental Property ROI Calculator FAQs
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.
What does the 5-year ROI assume about rent growth?
It assumes rent and maintenance grow each year at the same rate you enter for appreciation. That keeps the projection to one growth input — raise or lower appreciation above to see how sensitive the 5-year figure is to that shared assumption.
Methodology, Review, and Limits
This rental ROI workup runs entirely in your browser from the inputs above — no data leaves your device. The math uses standard rental formulas: collected rent net of vacancy, operating expenses, NOI and cap rate, mortgage principal and interest, cash-on-cash return on cash invested, break-even rent, and a 5-year total ROI with rent and maintenance growing at the appreciation rate. Figures were last reviewed September 2026. Read how PropCalc calculators work, the financial disclaimer, or contact PropCalc with a correction.