Rental property ROI calculator
It adds net rent and net sale proceeds and compares them with everything you paid to buy and renovate.
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How to use it
- Enter purchase price, buying costs, renovation and furnishing, net annual rent after expenses, holding period and expected sale price.
- The result appears straight away and updates as you edit.
- Copy the result, or copy a link that keeps the same values to share it.
How it is calculated
Invested = price + buying costs + renovation. Net sale = sale price x (1 - selling costs). Profit = net annual rent x years + net sale - invested. ROI = profit / invested. Annual = (1 + ROI)^(1/years) - 1.
Example
Inputs: Purchase price = 1,000,000, Buying costs = 50,000, Renovation and furnishing = 50,000, Net annual rent after expenses = 50,000, Holding period = 5 years. Result: Total ROI: 29.64%; Total profit: 326,000.00; Compound annual return: 5.33%.
Limits and caveats
- Assumes an all-cash purchase and ignores when each year of rent arrives.
- The compound annual figure is an approximation, not the internal rate of return (IRR).
Questions about this tool
What goes into net rent?
Annual rent after vacancy, maintenance, service charges and management, which is the net operating income.
Why is the annual return below total ROI divided by years?
It compounds, so each year builds on the one before instead of a simple split.
Does it work for a financed property?
For a financed property use the cash on cash return calculator, which subtracts loan payments and divides by your cash.