Rental Income ROI Calculator

Model income, costs, loans, reserves, and annual performance. Review yearly cash flow, leverage, and equity. Make better rental decisions using realistic long-term investment assumptions.

Enter Property Inputs

Property acquisition price.
Legal, title, and transfer charges.
Repairs and value-add upgrades.
Optional setup spending.
Equity invested at purchase.
Annual mortgage rate.
Amortization period.
Base rental income.
Parking, laundry, or storage income.
Expected lost occupancy.
Applied to collected income.
Property tax allocation.
Landlord insurance cost.
Association or society dues.
Owner-paid utilities.
Routine upkeep budget.
Long-term replacement reserve.
Licensing, admin, and misc. items.
Yearly property value change.
Expected rent growth.
Expected operating cost growth.
Planned ownership duration.
Broker, tax, and closing estimate.

Example Data Table

Input Example Value Purpose
Purchase Price $250,000 Sets the base property cost.
Monthly Rent $2,400 Drives core annual income.
Vacancy Rate 5% Reduces collectible rent.
Operating Expenses $795 monthly plus management Captures recurring ownership costs.
Down Payment 25% Determines financing leverage.
Holding Period 10 years Supports long-term ROI projection.

This example mirrors the default values already loaded into the calculator.

Formula Used

  • Annual Gross Income = (Monthly Rent + Other Monthly Income) × 12
  • Annual Effective Income = Annual Gross Income × (1 − Vacancy Rate)
  • Management Fee = Effective Income × Management Rate
  • Annual Operating Expenses = Fixed Annual Expenses + Management Fee
  • NOI = Annual Effective Income − Annual Operating Expenses
  • Mortgage Payment uses the standard amortization formula.
  • Annual Cash Flow = NOI − Annual Debt Service
  • Cap Rate = NOI ÷ Purchase Price × 100
  • Cash on Cash ROI = Annual Cash Flow ÷ Initial Cash Invested × 100
  • Total ROI = (Cumulative Cash Flow + Net Sale Proceeds − Initial Cash Invested) ÷ Initial Cash Invested × 100

How to Use This Calculator

  1. Enter the property purchase price and all acquisition costs.
  2. Set financing assumptions such as down payment, rate, and loan term.
  3. Fill in rental income, vacancy, and all monthly operating expenses.
  4. Add growth assumptions for rent, expenses, appreciation, and exit costs.
  5. Press Calculate ROI to view summary metrics, yearly projections, and the graph.
  6. Use the export buttons to save your results as CSV or PDF.

FAQs

1. What does rental ROI measure?

Rental ROI measures how much profit a property generates compared with the cash you invested. It combines income, expenses, financing, and exit assumptions into one performance view.

2. What is the difference between cap rate and cash on cash ROI?

Cap rate ignores financing and focuses on property operating performance. Cash on cash ROI includes debt payments and compares annual cash flow with the cash you actually invested.

3. Why is vacancy included?

Vacancy reduces collectible income. Even strong rentals can have turnover, late payments, or empty months, so using a vacancy rate makes the estimate more realistic.

4. Should maintenance and CapEx both be entered?

Yes. Maintenance covers routine repairs, while CapEx reserves cover larger future replacements such as roofs, HVAC systems, appliances, or flooring.

5. What does DSCR mean?

DSCR stands for debt service coverage ratio. It shows how comfortably NOI can cover annual loan payments. Values above 1 usually indicate stronger payment capacity.

6. Why does total ROI change with holding period?

A longer hold allows rent growth, appreciation, loan paydown, and cumulative cash flow to compound. It also changes your projected sale value and remaining mortgage balance.

7. Can I use this for cash purchases?

Yes. Set the down payment to 100%. The loan amount and debt service become zero, so the calculator evaluates an all-cash investment.

8. Are these results guaranteed?

No. The calculator estimates outcomes from your inputs. Actual results depend on market conditions, tenant quality, financing terms, repairs, taxes, and local regulations.

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Important Note: All the Calculators listed in this site are for educational purpose only and we do not guarentee the accuracy of results. Please do consult with other sources as well.