Rental Property ROI Calculator
Calculate total ROI including cash flow, equity buildup, and appreciation over time.
By Konstantin Iakovlev · Updated April 2026 · Source: CFPB — Owning a Home
Monthly Cash Flow
-$421.73
Annual Cash Flow
-$5,060.71
Cap Rate
4.70%
Cash-on-Cash Return
-7.33%
Net Operating Income
$14,100.00
Total Cash Invested
$69,000.00
Monthly Expense Breakdown
| Mortgage (P&I) | $1,596.73 |
| Property Tax | $300.00 |
| Insurance | $125.00 |
| HOA | $0.00 |
| Vacancy Reserve | $100.00 |
| Property Management | $200.00 |
| Maintenance Reserve | $100.00 |
| Total Monthly Expenses | $2,421.73 |
Use the Rental Property 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 compares the annual cash flow it produces against the total amount you've sunk into it. That comparison carries particular weight in 2026, when property values have risen sharply and rental yields differ so much from one market to the next that a careful ROI read is what separates a profitable deal from a marginal one.
The tool applies the cash-on-cash return formula: (Annual Cash Flow ÷ Total Cash Invested) × 100. Annual cash flow is rental income less every expense, mortgage payments, taxes, insurance, maintenance, and vacancy allowances among them, while total cash invested combines your down payment, closing costs, and any initial repairs or improvements.
Several errors tend to skew the result. Vacancy rates, typically 5-10%, get left out; maintenance costs, usually 1-2% of property value each year, get underestimated; and property management fees go unaccounted for when they apply. It's also worth noting that ROI figured this way excludes potential appreciation, which can shift total returns meaningfully over the years you hold the property.
$350,000 Single-Family Rental Property with $70,000 Down Payment
- 1 Property purchase price: $350,000 with 20% down payment ($70,000), closing costs ($8,000), and initial repairs ($5,000) for total cash invested of $83,000. Monthly rent collected is $2,800.
- 2 Calculate annual rental income: $2,800 × 12 months = $33,600. Subtract annual expenses: mortgage payment ($1,680/month × 12 = $20,160), property taxes ($3,500), insurance ($1,200), maintenance ($3,500), and vacancy allowance ($1,680) for total expenses of $30,040.
- 3 Annual cash flow equals rental income minus expenses: $33,600 - $30,040 = $3,560 positive cash flow before taxes.
- 4 ROI calculation: ($3,560 ÷ $83,000) × 100 = 4.29% cash-on-cash return. This represents a modest but positive return that could be attractive depending on local market conditions and comparison to other investment alternatives in 2026.
Source: CFPB — Owning a Home · Last updated: April 2026
Frequently Asked Questions
What is a realistic ROI on rental property in 2026?
How do you calculate ROI on a rental property?
Should I include property management fees in ROI calculations?
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