Real Estate ROI Calculator
Calculate ROI, cash-on-cash return, cap rate, and NOI for rental and investment properties.
1. ROI = (Net Profit ÷ Total Investment) × 100
2. Cash-on-Cash Return = (Annual Cash Flow ÷ Cash Invested) × 100
3. Cap Rate = (NOI ÷ Purchase Price) × 100
4. NOI = Annual Rental Income - Operating Expenses
Where:
• Net Profit = Total Income - All Expenses - Mortgage Payments
• Total Investment = Down Payment + Closing Costs + Rehab Costs
• Cash Invested = Down Payment + Closing Costs
Purchase Price: $250,000
Down Payment: $50,000 (20%)
Monthly Rent: $2,000
Annual Expenses: $6,000
Mortgage Payment: $1,200/month
Results:
Annual Rental Income: $24,000
Annual Mortgage: $14,400
Net Annual Cash Flow: $3,600
Cash-on-Cash Return: 7.2%
Cap Rate: 7.2%
What is ROI in real estate investing?
ROI (Return on Investment) in real estate measures the profitability of a property investment as a percentage of your total investment. It's calculated as: (Net Profit ÷ Total Investment) × 100. For example, if you invest $50,000 and earn $7,500 annual profit, your ROI is 15%.
What is a good ROI for rental property?
A good ROI for rental property typically ranges from 8-12% annually. Properties with 10%+ ROI are considered excellent investments. However, 'good' ROI depends on your market, property type, risk tolerance, and investment goals.
What is cash-on-cash return?
Cash-on-cash return measures the annual cash flow you receive relative to the actual cash you invested (down payment + closing costs). It's more relevant than ROI for leveraged investments because it shows return on your cash, not the total property value.
What is cap rate in real estate?
Cap rate (capitalization rate) is the ratio of a property's net operating income (NOI) to its purchase price, expressed as a percentage. It helps compare properties regardless of financing and indicates the property's income potential.
Should I use ROI or cash-on-cash return?
Use both! ROI shows total return on investment including appreciation and equity buildup. Cash-on-cash return shows your annual cash flow return. Together, they give a complete picture of your investment performance.
🔗 Related Calculators
📐 Formula
1. ROI = (Net Profit ÷ Total Investment) × 100
2. Cash-on-Cash Return = (Annual Cash Flow ÷ Cash Invested) × 100
3. Cap Rate = (NOI ÷ Purchase Price) × 100
4. NOI = Annual Rental Income - Operating Expenses
Where:
• Net Profit = Total Income - All Expenses - Mortgage Payments
• Total Investment = Down Payment + Closing Costs + Rehab Costs
• Cash Invested = Down Payment + Closing Costs
📝 Example Calculation
Purchase Price: $250,000
Down Payment: $50,000 (20%)
Monthly Rent: $2,000
Annual Expenses: $6,000
Mortgage Payment: $1,200/month
Results:
Annual Rental Income: $24,000
Annual Mortgage: $14,400
Net Annual Cash Flow: $3,600
Cash-on-Cash Return: 7.2%
Cap Rate: 7.2%