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Rental Property ROI Calculator
The complete picture: year-by-year cash flow, rent growth, expense inflation, equity build, and the IRR on your whole hold including the sale. Every field editable, no report caps.
Educational calculators — always consult a licensed professional before making financial decisions.
The agreed acquisition price.
Investment properties typically need 25%+ down.
Investment rates run above owner-occupied rates.
Gross rent across all units.
Tax, insurance, maintenance, management, repairs. Exclude the mortgage.
Parking, laundry, storage. Enter 0 if none.
Legal, title, inspection, lender fees.
One-time work to make it rent-ready.
~5% is a common baseline.
US long-run average ~3–4%.
How fast rents rise in this market.
How fast costs rise.
~7% is typical in this market.
30-year terms are typical here.
Longer holds usually improve returns.
Total Profit — 10 Year Hold
+$142,090
Cash flow + sale proceeds − $101,500 invested
Screeners
GRM
11.7
Price ÷ annual rent
1% rule
0.70%
✗ Below 1%
Year-1 NOI
$19,500
After vacancy & expenses
Debt service
$21,489
Annual mortgage
Year-by-Year Pro-Forma
| Yr | Cash flow | Cumulative | Value | Equity |
|---|---|---|---|---|
| 1 | -$1,989 | -$1,989 | $362,250 | $102,291 |
| 2 | -$1,359 | -$3,347 | $374,929 | $117,700 |
| 3 | -$709 | -$4,056 | $388,051 | $133,759 |
| 4 | -$38 | -$4,093 | $401,633 | $150,496 |
| 5 | +$654 | -$3,439 | $415,690 | $167,946 |
| 6 | +$1,368 | -$2,071 | $430,239 | $186,142 |
| 7 | +$2,105 | $33 | $445,298 | $205,120 |
| 8 | +$2,865 | $2,898 | $460,883 | $224,919 |
| 9 | +$3,649 | $6,547 | $477,014 | $245,580 |
| 10 | +$4,458 | $11,005 | $493,710 | $267,145 |
Equity = property value − remaining loan balance. Cash flow reflects rent growth and expense inflation compounding each year.
Where the Return Comes From
Pre-tax projection. Excludes income tax and depreciation. Growth assumptions compound — small changes move the result a lot, so test a conservative case too. Estimate only; consult a licensed professional.
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Reading a rental pro-forma properly
A pro-forma projects a rental investment forward year by year rather than freezing it at month one. Each year, gross rent grows at your rent-growth rate, operating expenses inflate at their own rate, the loan amortises a little further, and the property value compounds at your appreciation rate. The result is four numbers per year: cash flow, cumulative cash flow, property value, and equity (value minus remaining loan). This is where the real dynamics show up — a deal that's roughly break-even today often produces solid cash flow by year five, simply because rents tend to outrun expenses over time.
Why IRR is the honest headline. Cash-on-cash return measures year one. Cap rate measures the property with no financing at all. Neither captures a hold. IRR folds every year of cash flow plus the net sale proceeds into a single annualised figure, weighting early money more heavily than late money. It's the only metric that lets you fairly compare a high-cash-flow Midwest rental against a low-yield coastal property whose return is mostly appreciation.
Treat it as a model, not a prophecy. Appreciation and rent growth compound, so they dominate long holds and small input changes swing the answer hard — moving appreciation by a single point over 30 years can transform the outcome. The discipline is to run a conservative case beside your base case. Note this projection is pre-tax: it excludes income tax and depreciation, which are covered by the depreciation calculator. For financing qualification, check your DSCR.
How it works
Enter the purchase
Price, down payment, rate, term, closing costs, and any rehab.
Add income and expenses
Rent, other income, vacancy, and annual operating expenses.
Set growth and hold
Appreciation, rent growth, expense inflation, selling costs, and hold period.
What each metric answers
| Metric | Question it answers | Ignores |
|---|---|---|
| Cap rate | What does the property earn unlevered? | Your mortgage |
| Cash-on-cash | What does my cash earn in year one? | Appreciation, paydown |
| DSCR | Will a lender finance it? | Your personal income |
| IRR | What did the whole hold earn per year? | Income tax |
Use the screeners to triage and IRR to decide. All figures here are pre-tax.
Frequently asked questions
What is an IRR and why does it matter more than cash flow?+
Internal rate of return (IRR) is the annualized return across the entire life of the investment — every year of cash flow plus the proceeds when you sell — accounting for the fact that money received sooner is worth more than money received later. Cash flow alone tells you what the property pays you each month; IRR tells you what the whole investment earned per year. A property with weak cash flow but strong appreciation can have a far better IRR than one with the opposite profile.
What does the pro-forma table show?+
It projects the investment year by year: gross rent growing at your rent-growth rate, operating expenses rising with inflation, the resulting cash flow, cumulative cash flow, the property's appreciating value, and your equity (value minus remaining loan balance). This is where the compounding shows up — a deal that is break-even in year one often cash-flows meaningfully by year five if rents outpace expenses.
How accurate are these projections?+
They're only as good as the assumptions. Appreciation and rent growth compound, so small changes produce large differences over a 10- to 30-year hold — a one-point change in appreciation can swing total profit substantially. Treat the output as a model, not a forecast: run a conservative case alongside your base case, and be especially careful with the appreciation input, which is both the largest and least predictable component of total return.
Why does the calculator exclude income tax?+
This is a pre-tax projection. Tax treatment varies enormously by investor — your marginal rate, depreciation, how losses can be offset, and the tax on sale all depend on personal circumstances and jurisdiction. Modeling it generically would create false precision, so we show pre-tax figures and cover tax separately in dedicated depreciation and capital-gains tools.
Model the whole hold, not just month one.
Back to the calculator ↑Cost ranges and rates here are checked against contractor quotes and published industry data. If a number still looks off, email Support@RealCostIQ.com and we'll review and fix it.