A rental property ROI calculator gives you a complete financial picture of a buy-and-hold investment: monthly cash flow, cap rate, cash-on-cash return, gross rent multiplier, and total return with appreciation.
Purchase & Financing
Income
Annual Expenses
How to Analyze Rental Property ROI
This rental property ROI calculator computes every key metric investors use to evaluate buy-and-hold properties: monthly cash flow, cap rate, cash-on-cash return, gross rent multiplier, and net operating income. Use it to compare multiple properties on the same metrics before deciding where to invest.
Understanding Cash Flow
Monthly cash flow is your rental income minus all expenses including mortgage. Positive cash flow means the property pays for itself and generates income. Negative cash flow means you're subsidizing the investment monthly, which is only sustainable if appreciation or equity pay-off is the strategy.
Vacancy and Expense Rates
Use realistic vacancy (5-8%) and expense rates. Maintenance at 5-8% of gross rents and CapEx reserve at 5-10% cover unexpected repairs and major replacements (roof, HVAC, appliances). Many new investors underestimate expenses and are surprised when cash flow is much lower than expected.
The 1% Rule
A quick screening tool: monthly rent should be at least 1% of purchase price. A $200,000 property should rent for $2,000/month. Markets meeting the 1% rule typically cash flow well. Markets far below 1% (like many major cities at 0.4-0.6%) require an appreciation or value-add strategy to make sense.
Frequently Asked Questions
Is this rental property ROI calculator free?
Yes, completely free with no signup or account required. All calculations run locally in your browser.
Is my data private?
Absolutely. All calculations run in your browser — nothing is sent to any server.
What is a good cash-on-cash return for rental property?
Most investors target 8-12% cash-on-cash return. In high-cost markets, 5-7% may be acceptable if appreciation potential is strong. Below 5% is generally considered weak unless you have a specific equity strategy.
What is the difference between cap rate and cash-on-cash return?
Cap rate measures the property's unlevered return (NOI/value), independent of financing. Cash-on-cash return measures your actual return on the cash you invested, including mortgage payments. Cash-on-cash can be higher or lower than cap rate depending on your financing.
What vacancy rate should I use?
A common rule of thumb is 5-8% for single-family homes in stable markets, 8-10% for multifamily. In high-demand markets vacancy may be lower, but always budget for at least some vacancy. Many investors use 5% as a floor even in tight markets.
Should I include appreciation in my ROI calculation?
Including appreciation is optional and speculative. Conservative investors analyze deals based on cash flow alone (without appreciation). Including 2-3% annual appreciation gives a more complete picture of total return but should be treated as a bonus, not a requirement for the deal to work.