Rental ROI Calculator
Calculate comprehensive long-term ROI for rental properties. Include cash flow, property appreciation, and mortgage paydown for complete investment analysis.
Rental ROI Calculator
Calculate long-term return on investment including cash flow, appreciation, and loan paydown.
Comprehensive Rental Property ROI
Long-term rental property ROI includes multiple sources of return that work together to build wealth over time. This calculator accounts for all major return components to give you a complete picture of investment performance.
Three Sources of Rental Property Returns
- Cash Flow: Monthly rental income minus all expenses and debt service
- Appreciation: Increase in property value over time
- Loan Paydown: Equity buildup as tenants pay down your mortgage
Key Assumptions
- Appreciation Rate: Historical average is 3-4% annually
- Holding Period: Longer periods smooth out market volatility
- Rent Growth: Typically tracks inflation (2-3% annually)
- Expense Growth: Property taxes and maintenance costs increase over time
Total Return Analysis
The total return combines all three sources and is expressed as both:
- Total ROI: Cumulative return over the holding period
- Annualized ROI: Average annual return, useful for comparing to other investments
Investment Strategy Considerations
Different markets and property types emphasize different return sources:
- Cash Flow Markets: Focus on rental income (Midwest, South)
- Appreciation Markets: Emphasize property value growth (Coastal areas)
- Balanced Markets: Provide both cash flow and appreciation