ROI Calculator
Calculate the return on investment (ROI) for a real estate purchase and sale.
Return on Investment
9.4%
Profit
💡 Plain English: You invested $320,000 and sold for $380,000. After $30,000 in selling costs, your profit is $30,000 — a 9.4% return on your investment.
About the ROI Calculator (Real Estate)
Return on investment (ROI) measures how much profit an investment property generates relative to the cash you put in. It is the key metric for comparing one real estate deal against another — or against non-real-estate investments.
How this calculator works
Enter your total cash invested (down payment, closing costs, and rehab), annual rental income, and annual expenses. The calculator shows your annual ROI as a percentage.
The math, in plain English
ROI = annual net profit ÷ total cash invested × 100. Net profit = rental income − all expenses (including mortgage, taxes, insurance, maintenance, and vacancy).
Key terms
- •ROI — return on investment, expressed as a percentage
- •Cash invested — the upfront cash you put into the property
- •Net profit — income left after all operating expenses and debt service
Tips & things to know
- ✓Compare ROI across properties using the same expense assumptions for a fair comparison.
- ✓ROI ignores appreciation — it measures ongoing cash return, not total return.
- ✓Leverage (a mortgage) can amplify ROI, but it also increases risk.
Frequently asked questions
What is a good ROI on rental property?+
Many investors aim for 8–12% or higher, but expectations vary by market and strategy.
How is ROI different from cap rate?+
Cap rate ignores financing; ROI accounts for the mortgage and the cash you actually invested.
This calculator is for educational purposes only and uses estimates. Always consult a licensed mortgage professional for advice specific to your situation.