Interest Rate Calculator Savings

Investment Property ROI Calculator

Purchase Details

Financing

Monthly Income

Annual Expenses

function calculateROI() { // Inputs var purchasePrice = parseFloat(document.getElementById('purchasePrice').value) || 0; var renovationCosts = parseFloat(document.getElementById('renovationCosts').value) || 0; var closingCosts = parseFloat(document.getElementById('closingCosts').value) || 0; var downPayment = parseFloat(document.getElementById('downPayment').value) || 0; var interestRate = (parseFloat(document.getElementById('interestRate').value) || 0) / 100 / 12; var loanTerm = (parseFloat(document.getElementById('loanTerm').value) || 0) * 12; var monthlyRent = parseFloat(document.getElementById('monthlyRent').value) || 0; var vacancyRate = (parseFloat(document.getElementById('vacancyRate').value) || 0) / 100; var propertyTaxes = parseFloat(document.getElementById('propertyTaxes').value) || 0; var insurance = parseFloat(document.getElementById('insurance').value) || 0; var maintenance = parseFloat(document.getElementById('maintenance').value) || 0; // Calculations var totalInvestment = downPayment + renovationCosts + closingCosts; var loanAmount = purchasePrice – downPayment; // Mortgage calculation var monthlyMortgage = 0; if (loanAmount > 0) { if (interestRate > 0) { monthlyMortgage = loanAmount * (interestRate * Math.pow(1 + interestRate, loanTerm)) / (Math.pow(1 + interestRate, loanTerm) – 1); } else { monthlyMortgage = loanAmount / loanTerm; } } var effectiveRent = monthlyRent * (1 – vacancyRate); var monthlyExpenses = (propertyTaxes + insurance + maintenance) / 12; var monthlyNOI = effectiveRent – monthlyExpenses; var monthlyCashFlow = monthlyNOI – monthlyMortgage; var annualNOI = monthlyNOI * 12; var annualCashFlow = monthlyCashFlow * 12; // Metrics var capRate = (annualNOI / purchasePrice) * 100; var cashOnCash = (annualCashFlow / totalInvestment) * 100; // Display results document.getElementById('results').style.display = 'block'; document.getElementById('cocResult').innerText = cashOnCash.toFixed(2) + '%'; document.getElementById('capResult').innerText = capRate.toFixed(2) + '%'; document.getElementById('flowResult').innerText = '$' + Math.round(monthlyCashFlow).toLocaleString(); document.getElementById('totalInvested').innerText = '$' + totalInvestment.toLocaleString(); }

How to Calculate ROI on Investment Property

Real estate investment is one of the most proven ways to build wealth, but success depends on accurate financial forecasting. The Investment Property ROI Calculator helps investors determine if a rental property is a "deal" or a "dud" by analyzing key performance metrics.

Understanding the Key Metrics

To evaluate a property effectively, you need to look beyond just the monthly rent. Professional investors focus on three primary numbers:

• Cap Rate (Capitalization Rate): This measures the property's natural rate of return without considering financing. It is calculated by dividing the Net Operating Income (NOI) by the purchase price. A "good" cap rate varies by market but generally ranges between 4% and 10%.
• Cash on Cash Return (CoC): This is the most important metric for financed buyers. It measures the annual cash flow relative to the actual cash you paid out of pocket (down payment + closing + repairs).
• Net Monthly Cash Flow: This is the "take-home" money after all bills, taxes, and the mortgage are paid. Positive cash flow is essential for long-term sustainability.

Realistic Example of Property ROI

Imagine you buy a duplex for $300,000. You put 20% down ($60,000) and spend $15,000 on renovations and $6,000 on closing. Your total "cash in" is $81,000.

If the units rent for a combined $2,500/month and your total expenses (mortgage, taxes, insurance, repairs) come to $2,100/month, you are left with $400/month in profit. Your annual cash flow is $4,800. In this scenario, your Cash on Cash Return would be roughly 5.9%.

Hidden Costs to Watch For

Many novice investors fail because they ignore "the phantoms":

1. Vacancy Rate: Properties aren't always occupied. Factoring in a 5-8% vacancy rate is standard practice.
2. Capital Expenditures (CapEx): Major repairs like a new roof or HVAC unit happen eventually. Setting aside 5-10% of rent for these items is vital.
3. Property Management: Even if you manage it yourself now, you should budget for a manager (usually 8-10% of rent) to see if the property remains profitable if you step back.