Rental Property ROI Calculator
Rental Property ROI Calculator helps investors estimate Return on Investment (ROI), Cash-on-Cash Return (CoC), Capitalization Rate (Cap Rate), Net Operating Income (NOI), and Annual Cash Flow for a rental property.
Results:
| Metric | Value |
|---|
Summary:
Formulas Used
- Net Operating Income (NOI):
(Monthly Rental Income × 12 × (1 - Vacancy Rate / 100)) - (Monthly Operating Expenses × 12 + Annual Property Taxes) - Annual Cash Flow:
NOI - Annual Mortgage Payment - Cap Rate:
(NOI / Purchase Price) × 100 - Cash-on-Cash Return (CoC):
(Annual Cash Flow / Down Payment) × 100 - ROI:
(Annual Cash Flow / Total Investment) × 100, where Total Investment = Down Payment + Closing Costs (assumed 5% of Purchase Price) - Annual Mortgage Payment:
Loan Amount × [Monthly Interest Rate × (1 + Monthly Interest Rate)^(Loan Term × 12)] / [(1 + Monthly Interest Rate)^(Loan Term × 12) - 1] × 12, where Loan Amount = Purchase Price – Down Payment, Monthly Interest Rate = Annual Interest Rate / 1200
Examples and Solutions
- Example 1: Purchase Price: $200,000, Down Payment: $40,000, Monthly Rental Income: $2,000, Operating Expenses: $500, Property Taxes: $3,000, Interest Rate: 5%, Loan Term: 30 years, Vacancy Rate: 5%
Solution: NOI: ($2,000 × 12 × 0.95) – ($500 × 12 + $3,000) = $14,800; Annual Mortgage: $9,664.09; Cash Flow: $5,135.91; Cap Rate: 7.4%; CoC: 12.84%; ROI: 11.41% - Example 2: Purchase Price: $150,000, Down Payment: $30,000, Monthly Rental Income: $1,500, Operating Expenses: $400, Property Taxes: $2,500, Interest Rate: 4.5%, Loan Term: 30 years, Vacancy Rate: 7%
Solution: NOI: ($1,500 × 12 × 0.93) – ($400 × 12 + $2,500) = $9,440; Annual Mortgage: $7,225.12; Cash Flow: $2,214.88; Cap Rate: 6.29%; CoC: 7.38%; ROI: 6.56% - Example 3: Purchase Price: $300,000, Down Payment: $60,000, Monthly Rental Income: $3,000, Operating Expenses: $700, Property Taxes: $4,000, Interest Rate: 6%, Loan Term: 20 years, Vacancy Rate: 3%
Solution: NOI: ($3,000 × 12 × 0.97) – ($700 × 12 + $4,000) = $22,540; Annual Mortgage: $22,697.76; Cash Flow: -$157.76; Cap Rate: 7.51%; CoC: -0.26%; ROI: -0.25% - Example 4: Purchase Price: $100,000, Down Payment: $20,000, Monthly Rental Income: $1,200, Operating Expenses: $300, Property Taxes: $1,500, Interest Rate: 4%, Loan Term: 30 years, Vacancy Rate: 10%
Solution: NOI: ($1,200 × 12 × 0.9) – ($300 × 12 + $1,500) = $7,650; Annual Mortgage: $4,771.68; Cash Flow: $2,878.32; Cap Rate: 7.65%; CoC: 14.39%; ROI: 12.79% - Example 5: Purchase Price: $250,000, Down Payment: $50,000, Monthly Rental Income: $2,500, Operating Expenses: $600, Property Taxes: $3,500, Interest Rate: 5.5%, Loan Term: 15 years, Vacancy Rate: 8%
Solution: NOI: ($2,500 × 12 × 0.92) – ($600 × 12 + $3,500) = $16,810; Annual Mortgage: $24,507.84; Cash Flow: -$7,697.84; Cap Rate: 6.72%; CoC: -15.40%; ROI: -13.73%
Summary for Examples: Average NOI: $14,248; Average Cash Flow: $434.70; Average Cap Rate: 7.11%; Average CoC: 3.79%; Average ROI: 3.36%