ROI Calculator
Calculate the return on investment for your rental property using multiple metrics including cash-on-cash return, cap rate, and net operating income.
Measure What Your Rental Actually Earns
Return on investment is the single most useful lens for comparing rental properties, yet most landlords never calculate it properly. A house that rents for $2,400 is not automatically better than one that rents for $1,800 - what matters is how much cash the property returns relative to the cash you put in, and how efficiently the asset itself produces income. This calculator computes four metrics at once: cash-on-cash return, cap rate, monthly cash flow, and net operating income (NOI), so you can evaluate a deal from every angle before you commit a down payment.
Enter the purchase price, your down payment, expected monthly rent, and total monthly expenses. If the property has appreciated since purchase, add its current value to see total ROI including equity growth. The math updates instantly as you type, which makes it easy to test what happens if rent comes in $100 lower or insurance runs $50 higher than you hoped.
Property Details
Include mortgage, insurance, taxes, maintenance, property management, etc.
Leave blank to use purchase price
Results
Annual return on your cash investment
Net operating income as % of property value
Monthly income after expenses
Understanding These Metrics
Cash-on-Cash Return
Measures the annual return on the actual cash you invested. A good cash-on-cash return is typically 8-12% or higher.
Cap Rate
The ratio of net operating income to property value. Higher cap rates indicate better returns, but may also indicate higher risk.
Net Operating Income (NOI)
Annual rental income minus operating expenses (excluding mortgage payments). This shows the property's profitability.
Monthly Cash Flow
The actual cash you receive each month after all expenses. Positive cash flow is essential for sustainable investing.
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Reading the Results
Cash-on-cash return answers the question every investor should ask first: for every dollar I locked into this deal, how many cents come back to me each year? Because it uses your actual cash invested rather than the full purchase price, it captures the effect of leverage. Cap ratestrips financing out entirely and describes the property's raw earning power - useful for comparing deals across markets. NOI is the annual income after operating costs, and monthly cash flow is the number that determines whether the property supports itself or quietly drains your savings.
A Worked Example
Suppose you buy a $240,000 single-family rental with a 20% down payment of $48,000. It rents for $1,950 per month, and your all-in monthly expenses - mortgage, taxes, insurance, maintenance reserves, and management - total $1,400. Monthly cash flow is $550, or $6,600 per year. Divide that by your $48,000 invested and the cash-on-cash return is 13.75%, a strong result for a leveraged single-family home. If the property later appraises at $255,000, the calculator adds the $15,000 equity gain to the $6,600 cash flow for a total ROI of 45% on your invested cash.
Now stress-test it: drop the rent to $1,750 and the same property returns just 8.75% cash-on-cash. That $200 swing is roughly the difference between an average tenant renewal and a month of vacancy spread across the year - which is exactly why running multiple scenarios before you buy matters more than any single projection.
Frequently Asked Questions
What is a good cash-on-cash return for a rental property?
Most buy-and-hold investors target a cash-on-cash return of 8-12%. Below 6%, your money may work harder in index funds with far less effort; above 12% usually signals either a strong deal or hidden risk (rough neighborhood, deferred maintenance, optimistic rent assumptions). Always sanity-check a high number by re-verifying the rent and expense inputs.
What is the difference between cap rate and cash-on-cash return?
Cap rate measures the property itself: net operating income divided by property value, ignoring financing. Cash-on-cash return measures your personal result: annual cash flow divided by the cash you actually invested. Two investors can buy identical properties at the same cap rate and see very different cash-on-cash returns depending on their down payments and loan terms.
Should I include my mortgage payment in monthly expenses?
For cash flow and cash-on-cash return, yes - include principal, interest, taxes, and insurance so the result reflects what actually hits your bank account. Note that including the mortgage makes the cap rate figure a levered number. To see a true unlevered cap rate, run the calculator a second time with only operating expenses (taxes, insurance, maintenance, management) and no debt service.
How does the calculator handle appreciation?
If you enter a current property value higher than the purchase price, the calculator adds that equity gain to your annual cash flow and divides the total by your cash invested to produce a total ROI figure. Appreciation is real wealth, but it is unrealized until you sell or refinance, so avoid relying on it to justify a deal with negative monthly cash flow.