Real Estate Investment ROI Calculator

Calculate total ROI including cash flow, appreciation, equity, and tax benefits over your hold period.

By Konstantin Iakovlev · Updated April 2026 · Source: CFPB — Owning a Home

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Total ROI

188.4%

Annualized ROI

23.6%

Cash-on-Cash Return

-3.2%

Investment Summary

Down Payment$60,000.00
Closing Costs$9,000.00
Total Cash Investment$69,000.00
Loan Amount$240,000.00

Returns

Property Appreciation$50,000.00
Net Rental Income (5 yr)$80,000.00
Total Return$130,000.00
Total ROI188.4%
Annualized ROI23.6%

Cash Flow & Equity

Annual Rental Income$24,000.00
Annual Expenses- $8,000.00
Annual Mortgage Payment- $18,203.56
Annual Cash Flow-$2,203.56
Monthly Cash Flow-$183.63
Cash-on-Cash Return-3.2%
Total Equity Built$125,333.65

Use the Real Estate Investment ROI Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

Return on investment for a rental property comes down to one comparison: how much annual cash flow the property throws off against the cash you put in to acquire it. With rental yields averaging 8-12% nationally in 2026 and values still appreciating, a clear ROI figure is what separates a profitable deal from a money pit and lets you line up competing properties side by side.

The math follows a single formula: ROI = (Annual Rental Income - Annual Expenses) ÷ Total Cash Invested × 100. On the expense side, count mortgage payments, property taxes, insurance, maintenance, a vacancy allowance, and property management fees. Total cash invested pulls together your down payment, closing costs, and any initial repairs or improvements made before the unit produces income.

Two errors trip up most investors. The first is ignoring vacancy rates, which typically run 5-10% and quietly erode projected income; the second is lowballing maintenance, which averages 1-2% of property value each year. Note too that this figure is a cash-on-cash return. It does not capture total return, which would fold in property appreciation and tax benefits such as depreciation deductions.

Duplex Investment: $320,000 Purchase with $64,000 Down Payment

  1. 1 Purchase a duplex for $320,000 with 20% down ($64,000), plus $8,000 in closing costs and $12,000 for initial renovations, totaling $84,000 cash invested.
  2. 2 Calculate annual income: $2,400/month rent × 12 months = $28,800. Calculate annual expenses: $1,680 mortgage payment × 12 = $20,160, plus $3,200 taxes, $1,200 insurance, $3,200 maintenance, $1,440 vacancy (5%), totaling $29,200.
  3. 3 Determine net annual cash flow: $28,800 rental income - $29,200 expenses = -$400 (negative cash flow of $400 annually).
  4. 4 Calculate ROI: -$400 ÷ $84,000 × 100 = -0.48% ROI. This property generates a negative return, indicating the rental income doesn't cover all expenses, requiring additional capital contribution from the investor.

Source: CFPB — Owning a Home · Last updated: April 2026

Frequently Asked Questions

What is a good ROI on real estate investment?
Total ROI of 8-12% annually is considered good for rental property, including cash flow, appreciation, equity buildup, and tax benefits. Fix-and-flip investors typically target 15-25% per project over a 6-12 month period.
How do I calculate ROI on an investment property?
Add annual net cash flow, equity gained from mortgage paydown, property appreciation, and tax savings from depreciation. Divide the total by your initial cash investment (down payment, closing costs, repairs). This gives your true total return on invested capital.
Does real estate beat the stock market?
Leveraged real estate can outperform stocks on a cash-on-cash basis due to mortgage leverage, tax benefits, and forced appreciation. However, stocks are more liquid, passive, and diversified. Historical average returns are roughly comparable at 8-12% when all factors are included.

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