ROI Calculator
Calculate the Return on Investment (ROI) and net profit for a real estate property, including buy-and-hold rental investments and fix-and-flip deals.
Calculation Results
The net cash returns from rental income and capital appreciation, minus all costs.
The overall percentage return on your initial purchase capital.
How This Calculator Works
To calculate the return on investment of a property deal:
- Enter the purchase price of the property.
- Enter the estimated or actual selling price.
- Provide the total rental income collected during the ownership period (use 0 if it is a pure flip).
- List all accumulated expenses (maintenance, property taxes, insurance, mortgage interest, buying and selling closing costs).
The calculator returns your total dollar profits and the ROI percentage.
Formula & Calculations
Net profit is calculated by adding the final selling price and total rental income, then subtracting the purchase price and all expenses:
Net Profit = (Selling Price + Rental Income) - (Purchase Price + Expenses)
The Return on Investment (ROI) is calculated as the net profit divided by the original purchase price, expressed as a percentage:
ROI = (Net Profit / Purchase Price) × 100
Step-by-Step Calculation Examples
Short-term Buy, Rent, and Sell
Buying a property for $300,000, collecting $24,000 in rent, spending $18,000 on expenses, and selling for $380,000.
- purchase_price: 300000
- selling_price: 380000
- rental_income: 24000
- expenses: 18000
- profit: $86,000.00
- roi: 28.67%
Frequently Asked Questions
What is a good ROI for real estate?
Generally, real estate investors target an annual ROI between 8% and 12%. For flips, a total ROI of 15% to 20%+ is preferred to account for the risk and effort involved.
What expenses should I include in the calculation?
Include all cash outflows: mortgage interest (not principal, as principal increases your equity), property taxes, insurance, maintenance, property management fees, utilities, and closing costs from both buying and selling (like real estate agent commissions).
What is the difference between ROI and Cash-on-Cash Return?
ROI calculates the return based on the total purchase price of the asset. Cash-on-Cash return calculates the yield based only on the actual cash cash-down and cash-out-of-pocket you invested, which factors in the leverage of a mortgage.