Real Estate Investment ROI Calculator

Start with Net Investment Profit ÷ Total Investment Cost × 100, but for real estate that profit needs to include rental cash flow, appreciation, and mortgage principal paydown together - not just the price change. This calculator adds all three (minus selling and acquisition costs) to get Total ROI, and separately calculates an IRR that accounts for when each cash flow actually happened.

Acquisition costs (down payment, closing costs, loan points, inspection, initial renovation), operating costs (taxes, insurance, HOA, repairs, maintenance, management, utilities, vacancy), financing costs (mortgage interest, loan fees), and exit costs (selling costs, transfer taxes, settlement expenses). Leaving any category out overstates your real return.

Mortgage principal payments are not rental cash flow - they reduce your loan balance and build equity instead. This calculator tracks principal paydown as its own line in the return breakdown, separate from cash flow, so it is counted once (at sale, as part of equity) rather than twice.

Yes, but only as a projection based on the appreciation rate you enter - never as a guarantee. Real appreciation is only "realized" when you actually sell. This calculator shows appreciation as its own line in the return breakdown so you can see how much of your projected return depends on it.

There is no single universal number - a "good" ROI depends on your financing, risk tolerance, property type, market, holding period, liquidity needs, and what else you could do with the same capital. Compare the projected return this calculator shows against your own target return (see the optional "Your Target Annual Return" field) rather than a generic benchmark.

Cap rate measures the property's operating return (NOI ÷ purchase price) independent of financing. Cash-on-cash measures annual cash flow relative to the actual cash you invested. Total ROI measures your total profit (cash flow + appreciation + principal paydown, minus costs) over the whole holding period relative to your cash invested. IRR is an annualized version of ROI that accounts for when each cash flow happened, not just the total.

Significantly. Financing reduces the cash you need upfront, which can raise cash-on-cash return and total ROI (leverage), but it also adds interest cost, which can reduce or even turn cash flow negative. The Leveraged vs. All-Cash comparison below shows this trade-off directly for your own numbers.

Vacancy reduces your effective rental income directly, which reduces NOI, cash flow, cap rate, and cash-on-cash return. It also raises your break-even rent and break-even occupancy - the Vacancy Sensitivity table shows exactly how much your numbers move at 3%, 5%, 8%, and 10% vacancy.

Yes - leaving out selling costs (commissions, transfer taxes, closing costs at sale) overstates your realized profit. This calculator always deducts projected selling costs from net sale proceeds before calculating total ROI.

Use the Rent Sensitivity and the Advanced "Annual Rent Growth"/"Annual Expense Growth" assumptions to see how changes compound over your holding period - small differences in growth rates can meaningfully change total ROI and IRR over a 5-10 year hold.