Rental Property ROI Calculator
Calculate cap rate, cash-on-cash return, and estimate IRR for your rental property investments. Make data-driven decisions with our comprehensive ROI analysis tool.
Property Information
Income & Expenses
Projections
Investment Returns
Monthly Breakdown
Annual Summary
Future Value Projection
Understanding Rental Property ROI Metrics
Cap Rate
Capitalization Rate measures the relationship between net operating income (NOI) and property value.
Calculated as NOI ÷ Property Value
Good benchmark: 8% or higher
Cash-on-Cash Return
Measures annual cash flow relative to actual cash invested.
Calculated as Annual Cash Flow ÷ Cash Invested
Good benchmark: 8% or higher
Internal Rate of Return (IRR)
Estimates your annualized return including cash flow, appreciation, and equity buildup over your holding period.
Good benchmark: 15% or higher
Learn More About Rental Property Investing
Frequently Asked Questions
What's a good cap rate for rental property?
Generally, 8%+ is excellent, 5-8% is good, and below 5% may indicate overpricing unless you're in a prime location with strong appreciation potential.
Should I use cap rate or cash-on-cash return?
Use both! Cap rate is better for comparing properties (eliminates financing differences), while cash-on-cash return shows your actual return on invested cash.
What expenses should I include in ROI calculations?
Include property taxes, insurance, HOA fees, maintenance (5-10% of rent), property management (8-10%), vacancy allowance (5-10%), and utilities you pay. Don't forget closing costs!
How accurate are the IRR estimates?
IRR estimates are based on your appreciation assumptions and holding period. They provide a good comparison between properties but actual returns will vary based on market conditions.
Can I have positive cap rate but negative cash flow?
Yes, with high leverage. This is called "alligator property" - it eats cash monthly. Ensure your cash-on-cash return meets your minimum requirements before investing.
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