Rental Property ROI Calculator
Rental Property ROI Calculator estimates the Return on Investment (ROI) and Capitalization Rate (Cap Rate) for a rental property based on purchase price, financing, rental income, and operating expenses. Enter the required data and click “Calculate ROI” to see your investment performance.
Enter Parameters
How to Use Rental Property ROI Calculator:
- Enter the property purchase price and down payment.
- Enter the mortgage interest rate and loan term.
- Enter the monthly rental income and annual operating expenses.
- Click “Calculate ROI” to see your cash-on-cash ROI and cap rate.
- Use “Share Result” or “Copy Result” to share or copy the output.
Calculation Details:
The calculator estimates ROI and Cap Rate using:
- Loan Amount: \\(\text{Purchase Price} – \text{Down Payment}\\)
- Monthly Mortgage Payment: \\(\text{M} = \text{P} \frac{\text{r}(1+\text{r})^\text{n}}{(1+\text{r})^\text{n} – 1}\\), where \\(\text{P} = \text{Loan Amount}\\), \\(\text{r} = \frac{\text{Annual Interest Rate}}{12 \times 100}\\), \\(\text{n} = \text{Loan Term} \times 12\\)
- Annual Cash Flow: \\(\text{Annual Rental Income} – \text{Annual Mortgage Payments} – \text{Annual Operating Expenses}\\)
- Total Investment: \\(\text{Down Payment} + \text{Closing Costs}\\) (Closing Costs = 3% of Purchase Price)
- Cash-on-Cash ROI: \\(\text{ROI (\%)} = \frac{\text{Annual Cash Flow}}{\text{Total Investment}} \times 100\\)
- Net Operating Income (NOI): \\(\text{Annual Rental Income} – \text{Annual Operating Expenses}\\)
- Cap Rate: \\(\text{Cap Rate (\%)} = \frac{\text{NOI}}{\text{Purchase Price}} \times 100\\)
Note: Closing costs are estimated at 3% of purchase price. Consult a real estate professional for precise figures.
Important Notes:
- Assumes fixed-rate mortgage and stable rental income/expenses.
- Operating expenses include taxes, insurance, maintenance, and management fees.
- Negative cash flow indicates the property may not be profitable without additional income or appreciation.
- Clipboard access requires HTTPS. If copying fails, try accessing over HTTPS or copy manually.