VickeryFinance • Real Estate Guides

Rental Property ROI Calculator

Price a rental with the full chain: cash invested, effective income, operating costs, mortgage, cash flow, cap rate, cash-on-cash return, and break-even rent.

3 propertiescompared side by side in the analyzer

5 yearsprojection in the full workbook

$49Excel & Google Sheets analyzer

ROI is a chain of separate questions

A rental can have an attractive rent and still be a weak investment. Start by asking how much cash you must put in, what income remains after vacancy and operating costs, what the mortgage consumes, and what cash is left. Then compare return measures instead of relying on one percentage.

The free Vickery Finance calculator and the fuller Rental Property ROI & Cash Flow Analyzer use the same discipline. Enter purchase price, down payment, loan terms, closing and rehab costs, rent, vacancy, taxes, insurance, HOA, maintenance, management, utilities, and other costs. The analyzer compares up to three properties and carries the winner into a five-year projection.

How to calculate rental property ROI

Use annual figures for return ratios and monthly figures for the cash decision. Keep the mortgage out of net operating income; it belongs in the cash-flow step below it.

Total cash invested. Add the down payment plus closing and rehab costs. This is the denominator for cash-on-cash return.
Effective gross income. Start with scheduled rent, subtract expected vacancy, and add any other recurring property income.
Net operating income. Subtract taxes, insurance, HOA, maintenance, management, utilities, and other operating expenses. Do not subtract the mortgage here.
Net cash flow. Subtract annual mortgage payments from NOI. Divide monthly net cash flow by one month’s rent only as a sanity check—not as the return.
Cap rate. Divide NOI by purchase price. Cap rate compares the property’s operating return before financing.
Cash-on-cash and total ROI. Cash-on-cash is annual net cash flow divided by total cash invested. Total ROI can also count principal paydown and appreciation, which should be shown separately.

Worked example from the analyzer

The included Phoenix example uses a $360,000 purchase and $2,950 monthly rent. It produces $294.06 of monthly net cash flow, a 3.3% cash-on-cash return, a 6.5% cap rate, and break-even rent of $2,612. Those figures are an educational example, not a forecast. Change vacancy, maintenance, taxes, insurance, or financing and the ranking can change—which is precisely why side-by-side comparison matters.

Before you call a deal good

Test the property with a vacancy allowance, realistic maintenance, management even if you plan to self-manage at first, and the actual loan payment. The analyzer also includes 1% and 2% rule checks and break-even rent, but rules of thumb do not replace local taxes, insurance, repairs, and financing terms.

Separate appreciation from cash return.
Do not ignore closing and rehab cash.
Rank by cash flow and cash-on-cash, not rent alone.
Review the Year 1–5 projection for growing expenses.

Run three properties side by side

The $49 Rental Property ROI & Cash Flow Analyzer includes Property Inputs, Cash Flow, ROI & Returns, a three-property Comparison, and a 5-Year Projection. It works in Excel and Google Sheets and flags negative cash flow.

Use the free Rental ROI calculator Get the full analyzer — $49

Frequently asked questions

What is the difference between cap rate and cash-on-cash?

Cap rate uses NOI before the mortgage and divides by purchase price. Cash-on-cash uses annual cash flow after the mortgage and divides by the actual cash invested.

What is break-even rent?

It is the rent needed for the property’s income to cover its operating costs and mortgage under the assumptions entered. The analyzer calculates it for each compared property.

Should appreciation be included in ROI?

It can be shown in total ROI, but keep it separate from cash flow and cash-on-cash so an investor can see how much return depends on a future value assumption.