Rental Property ROI Calculator
Analyze your rental property investment and calculate cash flow, cap rate, and return on investment instantly.
AProperty & Income
BExpenses & Financing
How to Use
- 1Enter your property price, down payment, and expected monthly rent.
- 2Enter your financing details including interest rate and loan term.
- 3Enter all expenses including tax, insurance, maintenance, and management fees.
- 4Click Calculate to see your cash flow, cap rate, ROI, and 10-year projection.
Example Calculation
Scenario: Purchase Price: $350,000 | Down Payment: $70,000 | Rent: $2,500/mo | Rate: 7.0% | Term: 30 years | Tax: $4,200/yr | Insurance: $1,200/yr | Maintenance: $150/mo | Management: 8% | Vacancy: 5%
This example shows how high mortgage rates can impact cash flow on rental properties.
Frequently Asked Questions
Q1: What is a good ROI for a rental property?
A "good" ROI depends on your goals and location, but many investors aim for a cash-on-cash return of 8% to 12% or higher. For total ROI (including appreciation and debt paydown), 15% or more is often targeted.
Q2: What is cap rate and what is a good cap rate?
Cap rate (Capitalization Rate) is the Net Operating Income divided by the property price. It ignores financing and shows the property's natural yield. A "good" cap rate varies by market but typically ranges from 4% in high-demand cities to 10% in smaller markets.
Q3: What is cash on cash return?
Cash on Cash (CoC) return is the annual pre-tax cash flow divided by the total cash actually invested (your down payment, closing costs, etc.). It's a critical metric for understanding your direct cash profit.
Q4: How does vacancy rate affect rental property ROI?
Vacancy rate reduces your effective gross income. Even a property that is full now will eventually have turnovers. Investors typically budget 5% to 8% for vacancy to ensure their financial projections are realistic.
Q5: What is Gross Rent Multiplier (GRM)?
GRM is the property price divided by its annual gross rental income. It's a quick way to screen properties: a lower GRM usually indicates a better investment, but it doesn't account for expenses.
This calculator provides estimates for informational purposes only. Actual ROI may vary based on market conditions, actual expenses, and taxes. Consult a professional advisor before investing.