Rental Property ROI Calculator

Total return = (cash flow + appreciation + principal pay-down + tax benefit) / cash invested. The full picture.

Inputs

Depreciation × tax bracket — leave 0 if unsure.

Result

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General calculation reads

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How to use this calculator

  • Estimate each return component.
  • Enter cash invested.
  • Read total ROI.

About this calculator

Real-estate returns have four components: cash flow (rent − expenses − mortgage), appreciation (property value going up), principal pay-down (each mortgage payment grows equity), and tax benefit (depreciation reduces taxable income). Add all four and divide by cash invested. Most leveraged rentals show 15-25% total ROI even when cash-on-cash is only 6-8%.

Frequently asked

How do I estimate appreciation?+
US average is ~3-5% per year long-term. Hot markets exceed; flat markets lag. Conservative pro-forma: 2-3%. Be realistic.
Do all 4 components matter equally?+
No — cash flow and pay-down are realized; appreciation and tax benefit are paper until you sell. Heavily-appreciated returns vanish in a downturn.
Is "tax benefit" guaranteed?+
No — depends on your bracket and ability to use passive losses. Conservative pro-formas often set it to zero.
How to compute principal pay-down?+
In year 1 of a 30-year mortgage at 7%, ~10% of payments go to principal; rises over time. Use an amortization schedule for precision.
What about capex and one-time costs?+
Subtract from cash flow over expected useful life. A $10k roof every 25 years = $400/year against cash flow.

Related calculators

Cash-on-Cash Return Calculator
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Cap Rate Calculator
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NOI (Net Operating Income) Calculator
NOI = gross income − operating expenses. Excludes mortgage payments, capex, depreciation, and income tax.
Gross Rent Multiplier (GRM) Calculator
GRM = property price / gross annual rent. Quick screening metric (lower is better).
DSCR (Debt Service Coverage Ratio) Calculator
DSCR = NOI / annual debt service. Lenders typically require ≥ 1.20-1.25.
1% Rule Calculator
Quick rental screening: monthly rent should be ≥ 1% of purchase price.

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