Calculator Inputs
Example Data Table
| Scenario | Purchase | Renovation | Uplift | Hold | Appreciation | Projected Sale | ROI (Approx.) |
|---|---|---|---|---|---|---|---|
| Baseline | $180,000 | $15,000 | 8% | 5y | 3% | $239,186 | 35%+ |
| Faster Growth | $180,000 | $20,000 | 10% | 5y | 5% | $281,510 | 50%+ |
| Short Hold | $180,000 | $12,000 | 6% | 2y | 3% | $207,191 | 10%+ |
How to Use This Calculator
- Enter purchase price and estimated buying costs.
- Add renovation cost and expected value uplift.
- Set holding years and appreciation for sale projection.
- Include selling costs, taxes, and financing details.
- Add rent, vacancy, and annual operating expenses.
- Press calculate to view results above the form.
Formula Used
- Post-renovation value = Purchase Price × (1 + Uplift %)
- Projected sale price = Post-renovation Value × (1 + Appreciation %)Years
- Selling costs = Sale Price × Selling Costs %
- Effective rent = Annual Rent × (1 − Vacancy %)
- NOI = Effective Rent − Operating Costs
- Net profit = Net Sale + Total Cashflow − Total Cash Invested
- Total ROI = Net Profit ÷ Total Cash Invested
- Annualized ROI = (Ending ÷ Invested)1/Years − 1
Value uplift and renovation impact
A renovation budget should be tied to measurable uplift. If a $15,000 upgrade lifts value by 8%, a $180,000 home becomes $194,400 immediately. The renovation-only ROI compares (value increase minus renovation cost) to renovation cost, revealing whether improvements are priced efficiently. Add buying costs too; at 2% closing costs, upfront cash rises by $3,600.
Appreciation and holding period sensitivity
Market appreciation compounds over time. Starting from $194,400, a 3% annual rate for five years projects about $225,300 before selling costs. If appreciation is 5% instead, the same horizon targets roughly $248,200, a difference near $22,900. Longer holds amplify compounding, but they also increase the time your cash stays invested, so annualized return may decline even when total profit rises.
Cashflow from rent and operating costs
Rental income can stabilize outcomes when price growth is uncertain. With $12,000 annual rent and 6% vacancy, effective rent is $11,280. If operating costs total $4,250, NOI becomes $7,030. Subtracting debt service converts NOI into annual cashflow after financing, which influences payback and risk. If debt service is $12,000 yearly, cashflow turns negative, signaling a reliance on appreciation.
Financing effects on equity build
Leverage increases exposure to both gains and losses. A 20% down payment on $180,000 creates a $144,000 loan. Monthly payments reduce the balance over time; the remaining balance at sale is paid from sale proceeds. Lower interest improves cashflow and reduces payoff drag, while shorter terms accelerate equity but raise payments. Compare all-cash versus financed outcomes to see sensitivity.
Interpreting ROI, taxes, and decisions
Total ROI compares net profit to total cash invested, including down payment, buying costs, and renovation. The model estimates selling costs and capital gains tax on taxable gain to avoid overstating results. Use scenario testing to set target uplift, acceptable payback, and a realistic exit price. Track both total ROI and annualized ROI for decision clarity.
FAQs
Q1: What does total cash invested include?
A: Total cash invested adds the down payment, buying closing costs, and renovation cost. It excludes the financed loan portion because that is repaid from future cashflows or sale proceeds.
Q2: How is projected sale price calculated?
A: Sale price starts with post‑renovation value, then compounds by the assumed annual appreciation rate for the holding period. Selling costs are applied as a percentage of the sale price.
Q3: Why can cashflow payback be missing?
A: Payback is only shown when annual cashflow after debt is positive. If rent is low or debt service is high, cashflow can be negative even when total ROI is strong.
Q4: How does financing change the result?
A: Financing reduces upfront cash but adds interest expense. Monthly payments affect annual cashflow and the remaining loan balance at sale, which reduces net sale proceeds.
Q5: Is capital gains tax handled accurately?
A: The tax is a simplified estimate applied to taxable gain after selling costs and basis. Real rules vary by location, residency, depreciation, and exemptions, so treat it as a planning estimate.
Q6: Which ROI should I rely on most?
A: Use total ROI to compare profit versus cash invested, and annualized ROI to compare deals with different holding periods. When risk is a concern, weigh cashflow stability alongside both.