Rental Property ROI Calculator
Rental property ROI calculator. Monthly cash flow, cash-on-cash return, cap rate, gross rental yield, total ROI (cash flow + principal paydown + appreciation). The complete real estate investor analysis.
Rental Property ROI Calculator
Annual P&L
| Annual rent | — |
| − Vacancy | — |
| − Property tax | — |
| − Insurance | — |
| − Maintenance | — |
| − Management | — |
| − HOA | — |
| = Net Operating Income (NOI) | — |
| − Mortgage | — |
| = Annual cash flow | — |
Total return components
| Year-1 cash flow | — |
| + Year-1 principal paydown | — |
| + Year-1 appreciation | — |
| ÷ Total cash invested | — |
| = Total ROI (year 1) | — |
Key metrics
| Gross rental yield | — |
| Operating expense ratio | — |
| Monthly mortgage P&I | — |
How to use the rental property ROI calculator
Enter purchase price + financing
Price, down payment as a share of it, rate and term. Use the terms from a lender quote for an investment property, which can differ from an owner-occupied loan. The loan is the price minus the down payment, repaid in level monthly payments.
Enter rent + operating expenses
Monthly rent from comparable listings or a current lease, then property tax, insurance, any HOA, and vacancy, management and maintenance as shares of rent. Net operating income (NOI) is rent minus all of these, before the mortgage.
Enter appreciation assumption
A yearly change in the property value. It feeds only the total-return line, and it is the least certain input on the page, so try zero as well as your central guess.
Read the headline metrics
Cash flow is NOI minus the mortgage. Cash-on-cash is that ÷ the cash you put in (down payment, closing, rehab). Cap rate is NOI ÷ price, ignoring financing. Total return adds year-one principal repaid and appreciation to cash flow.
Check the 1% screen, then the real numbers
The 1% rule asks whether monthly rent is at least 1% of the price. It is a quick screen, not a test: the cash flow, cap rate and debt cover lines are what decide whether the deal pays.
Rental property ROI — the four metrics that matter most
A rental's returns come from four places, and the calculator shows each separately. Cash flow is the rent left after operating costs and the mortgage. Principal repaid is the part of each mortgage payment that reduces the loan. Appreciation is any change in the property's value. And for US owners, depreciation is a tax deduction that does not cost cash. Cash-on-cash return counts only the first; total return adds the second and third.
Operating income, cap rate and cash-on-cash
Net operating income is rent minus vacancy, management, maintenance, property tax, insurance and HOA, before any mortgage. Divided by the price it gives the cap rate, which compares properties whatever their financing. The mortgage then turns NOI into cash flow, and cash-on-cash divides that by the cash you actually put in. At this page's defaults (USD 350,000, 25% down, 7.5%, USD 2,800 rent) NOI is USD 21,552 a year and the mortgage USD 22,025, so the property runs about USD 473 a year negative. The cap rate is 6.2% and NOI covers the mortgage 0.98 times.
The cap rate describes the property; cash-on-cash describes your financing. A deal can be sound on the first and still lose money each month on the second.
Principal, appreciation and the total
On those defaults the first year repays USD 2,420 of principal, and 3% appreciation would add USD 10,500, for a total return of about 12% on the USD 100,500 invested, even though the cash flow is negative. That total depends almost entirely on the appreciation assumption, which is the least certain number on the page, so look at it with appreciation set to zero as well. Equity built through principal and price is not cash until you sell or refinance.
Depreciation in the US
IRS Publication 527 (2025) depreciates residential rental property over 27.5 years, straight line with a mid-month convention, and excludes land, which does not wear out. The deduction lowers taxable rental income without any cash leaving the account, but it is recaptured when you sell, and the rules on deducting rental losses are limited. This calculator does not model tax; check Publication 527 or an adviser for your case.
NOI, cap rate, cash-on-cash and total return on the default USD 350,000 rental
NOI = rent − vacancy, management, maintenance, property tax, insurance and HOA, before the mortgage.
Cap rate = NOI ÷ price. It ignores financing, so two buyers of the same property see the same cap rate.
Cash-on-cash = (NOI − mortgage payments) ÷ cash put in, which is where financing shows up.
On the defaults NOI is USD 21,552 against USD 22,025 of mortgage payments: about USD 473 a year negative.
On the defaults the cap rate is 6.2% and NOI covers the mortgage 0.98 times.
Year-one principal on the USD 262,500 loan at 7.5% is USD 2,420.
With 3% appreciation, total return on the defaults is about 12% on USD 100,500, despite negative cash flow.
The 1% rule asks whether monthly rent is 1% of price; the defaults reach 0.8%. It is a screen, not a test.
IRS Publication 527: residential rentals depreciate over 27.5 years, straight line, mid-month convention.
Land is not depreciable, so only the building's share of the price is (IRS Publication 527).
Frequently asked questions
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There is no single figure: it depends on what else the same cash could earn and how much risk you are taking. Damodaran's S&P 500 series compounds to about 10% a year over 1928–2025, with much larger swings than rent. Compare like with like, and remember that cash-on-cash ignores principal repaid and appreciation, which the total-return line adds.
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The common gaps are major repairs that come every few years rather than every month (roof, heating, appliances), the cost of finding and onboarding new tenants, legal and accounting fees, and rises in tax or insurance after you buy. If your operating costs come out far below what similar properties cost to run, check these before trusting the result.
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Not as cash: depreciation is a deduction, not money received, so it is left out of cash flow here. Its value is the tax it saves. In the US, IRS Publication 527 depreciates the building, not the land, over 27.5 years, and depreciation is recaptured when you sell. Model it with your own tax position rather than a rule of thumb.
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It is the least predictable input on the page, and it drives most of the total-return figure. Run the calculator at zero appreciation as well as your central case: if the deal only works with prices rising, that is a bet on the market, not a return from the property.
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Cap rate = NOI / purchase price. Ignores financing. Used by commercial investors to compare properties independent of leverage decision. A 7% cap rate is a 7% cap rate whether you pay all cash or 75% LTV. Cash-on-cash = annual cash flow / cash invested. Reflects leverage. Same property has different CoC depending on how much you put down. With high leverage, CoC can be much higher (or negative) than cap rate. For comparing properties: cap rate. For comparing your specific deal: cash-on-cash + total ROI.
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Depends on your time, distance, scale. Self-manage if: property is local (within 1-hour drive), you have time (3-10 hours/month per door), you're willing to learn landlord-tenant law. Hire manager if: property is distant, you have other commitments, you have multiple properties (manager fees become economical at 5+ doors). Management costs 8-12% of rent typically. Even with manager fees, properties usually still cash flow positive — the question is whether your time is worth more elsewhere.
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As a quick screen, yes; as a decision rule, no. It compares monthly rent with the price and ignores financing, taxes and costs entirely. Two properties at the same ratio can produce very different cash flow. Use it to decide what to analyse, then rely on the cash-flow, cap-rate and debt-cover lines.
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Only roughly. Short-term rentals have very different costs: cleaning and supplies per stay, furnishing, platform and management fees, and occupancy that varies by season, as well as local rules that can restrict them. Enter your realistic average monthly income and set vacancy, management and maintenance to match, and treat the result as a sketch.
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No. All inputs stay in your browser. ROI computations run entirely client-side. Open DevTools → Network when you click Analyse and you'll see zero outbound requests.
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Standard texts: Frank Gallinelli, What Every Real Estate Investor Needs to Know About Cash Flow. David Greene, Long-Distance Real Estate Investing. BiggerPockets (biggerpockets.com) — large free + paid community + podcast. Brandon Turner, The Book on Rental Property Investing. ASEAN-specific: PropertyGuru Singapore + Malaysia, Rumah123 Indonesia, Asia Property Awards for regional comparisons.
Method & sources
How it computes
NOI = rent - vacancy, management, maintenance shares - tax - insurance - HOA; cash flow = NOI - 12 level payments; cap rate = NOI / price; cash-on-cash = cash flow / (down + closing + rehab); total return adds year-one principal and appreciation. RecaProperty.rental, tested.
What this tool implements
- Bug fixed: the year-one breakdown reused three ids from elsewhere on the page, one of them the appreciation INPUT, so its cash-flow, appreciation and total-ROI cells always showed a dash. The page's example said year-1 principal on ~$260k at 7.5% is ~$3,200; on its own defaults ($262,500) it is $2,420. The defaults run about $473 a year cash-flow negative, cap rate 6.2%, NOI covering the mortgage 0.98x; the prose now says so instead of describing a profitable deal.
- IRS Publication 527 (2025): residential rental property depreciates over 27.5 years, straight line, mid-month convention; land is not depreciable. The verdict's REIT and savings-rate comparisons were removed; the S&P comparison now cites Damodaran (about 10% a year, 1928-2025).
- Removed as unsourced: ASEAN and Australian yield ranges, total-ROI ranges, rental-loan down-payment and rate premiums, cap-rate norms, Case-Shiller growth rates and STR cost ranges.
Sources
- Internal Revenue Service. Publication 527 (2025), Residential Rental Property. https://www.irs.gov/publications/p527
- Damodaran A. Historical returns on stocks, bonds and bills: 1928-2025 (S&P 500 including dividends). NYU Stern, updated January 2026. https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/hist…
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