Rental Property ROI Calculator

A good cash-on-cash return is 8-12% annually. Cap rates (net operating income / property value) of 5-10% are typical, varying by market. Total returns including appreciation often target 15-20%. Higher returns usually come with higher risk or more management effort.

Cash-on-Cash ROI = Annual Cash Flow / Cash Invested. Cap Rate = Net Operating Income / Property Value. Total Return includes cash flow, appreciation, tax benefits, and equity paydown. Use this calculator to see all metrics for your specific investment.

Include: mortgage, property taxes, insurance, maintenance (5-10% of rent), vacancy (5-8% of rent), property management (8-12% of rent if used), HOA fees, utilities (if paid by landlord), and capital expenditures (roof, HVAC, etc.).

Financing typically provides better returns through leverage. A $100,000 property bought with $20,000 down that appreciates 5% gives you 25% return on your cash (before expenses). However, paying cash eliminates mortgage risk and improves cash flow. Consider your risk tolerance and investment goals.

The 1% rule states that monthly rent should be at least 1% of the purchase price. A $200,000 property should rent for $2,000+/month. This is a quick screening tool, not a guarantee of profitability. In expensive markets (California, New York), the 0.5-0.75% rule may be more realistic.