Rental Property ROI Calculator
Calculate your return on investment for rental properties. Includes cash flow and appreciation to give you a complete picture of your investment returns.
How the ROI Calculator Works
Enter Property Details
Input your purchase price, monthly rent, and monthly expenses.
Set Appreciation Rate
Choose your expected annual property appreciation rate (typically 2-5%).
Get Your ROI
See your total annual return including both cash flow and appreciation.
Understanding ROI for Rental Properties
What is ROI?
Return on Investment (ROI) measures how much money you make relative to how much you invested. For rental properties, ROI includes both cash flow from rent and property appreciation.
ROI Formula:
ROI = (Annual Cash Flow + Annual Appreciation) ÷ Purchase Price × 100
What's a Good ROI?
Frequently Asked Questions
What expenses should I include?
Include all monthly expenses: mortgage payment, property taxes, insurance, maintenance, property management fees, HOA fees, and utilities (if paid by landlord).
How do I estimate appreciation?
Historical appreciation rates vary by location. Most markets average 2-5% annually. Check local real estate data or consult with a local real estate agent.
Should I include vacancy in my calculations?
Yes, it's wise to factor in some vacancy. Most landlords use 5-10% vacancy rate in their calculations to account for turnover and market conditions.
How does ROI compare to other investments?
Rental property ROI typically ranges from 4-12%, which compares favorably to stocks (7-10% average) and bonds (2-5%). Real estate also offers tax benefits and leverage opportunities.
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