Rental ROI Calculator
Estimate cash flow and returns on investment properties.
Purchase Details
Loan Terms
Income & Expenses
Monthly Mortgage (P&I):
$0.00
Total Monthly Expenses:
$0.00
Monthly Cash Flow:
$0.00
Annual Cash Flow:
$0.00
Cash on Cash ROI:
0.00%
Total Cash Invested:
$0.00
Rental Property Cash Flow & ROI Calculator
Real estate investing is a numbers game. Whether you are analyzing a single-family home, a duplex, or a condo, understanding your numbers is the only way to ensure profitability. This Rental Property ROI Calculator helps investors determine the viability of a potential investment by analyzing key metrics like monthly cash flow and Cash on Cash (CoC) Return.
Why Use a Cash Flow Calculator?
Many novice investors make the mistake of looking only at the rental income versus the mortgage payment. However, true profitability accounts for all operating expenses, including taxes, insurance, homeowner association (HOA) fees, and reserves for maintenance or vacancy. A property might look profitable on the surface but can quickly become a liability when these "hidden" costs are factored in.
Key Metrics Explained
1. Cash Flow
Cash flow is the net amount of money moving in or out of the business after all expenses have been paid.
Formula:
Monthly Rent – (Mortgage + Taxes + Insurance + HOA + Repairs + Vacancy) = Net Monthly Cash Flow
Monthly Rent – (Mortgage + Taxes + Insurance + HOA + Repairs + Vacancy) = Net Monthly Cash Flow
Positive cash flow means the property pays for itself and generates income. Negative cash flow (alligator property) requires you to pay out of pocket every month to keep the property running.
2. Cash on Cash Return (CoC ROI)
Cash on Cash Return measures the annual return on the actual cash you invested, rather than the total loan amount. It is one of the most important metrics because it allows you to compare real estate returns against other investment vehicles like stocks or bonds.
Formula:
(Annual Net Cash Flow / Total Cash Invested) × 100 = CoC ROI %
(Annual Net Cash Flow / Total Cash Invested) × 100 = CoC ROI %
Total Cash Invested usually includes your down payment, closing costs, and immediate repair costs.
Example Calculation
Let's say you buy a property for $200,000.
- Down Payment (20%): $40,000
- Closing Costs: $5,000
- Total Cash Invested: $45,000
After paying the mortgage and all expenses, the property generates $300 per month in pure profit.
- Annual Cash Flow: $300 × 12 = $3,600
- ROI: ($3,600 / $45,000) = 0.08 or 8%
In this scenario, your money is working for you at an 8% annual return, excluding additional benefits like tax depreciation and property appreciation.
What is a Good ROI?
A "good" ROI is subjective and depends on your strategy and the local market. Generally:
- 8-12%: Considered a solid return for long-term buy-and-hold rentals.
- 15%+: Excellent returns, often found in lower-cost markets or properties requiring renovation (BRRRR strategy).
- Below 5%: Might be acceptable in high-appreciation markets where the value of the home grows quickly, even if monthly cash flow is low.