Property ROI calculator
Calculate property ROI with a worked cost worksheet, holding-period rental income, loss scenarios and transparent annualisation assumptions.
By MarkMyProperty · Updated
ROI Calculator
Use the whole purchase cost plus counted acquisition costs, not just a down payment. Keep the same cost basis when comparing scenarios.
For a sale scenario, subtract counted selling costs from the sale price once. An unsold valuation is not cash received.
Enter the total over the holding period, not monthly rent. Use a negative amount for an operating loss. Blank excludes rental income and operating costs; 0 is an intentional zero scenario.
Use the same period as the property value and total rental income. Annualisation combines all income at the end; it does not use individual cash-flow dates.
Enter valid amounts and a time period to see your estimate. Rental income after costs can be negative; initial investment, property value and period must stay within the limits shown by each field.
ROI includes only your entered amounts. Count each cost once. Equivalent annualised return treats property value plus total rental income as an end-of-period amount; it is not a cash-flow IRR, a forecast or an after-tax return. Financing is not modelled separately.
Estimates use your inputs in one currency; selecting another currency changes the unit, without converting amounts. Buyability uses your chosen share of income and is not lender approval. Rent vs Buy compares home equity minus down payment, loan payments and maintenance against investing the down payment minus rent. It excludes taxes, transaction costs and investing monthly cash-flow differences.
How the calculation works
Use the whole purchase cost plus the acquisition costs you count as the initial investment. For a sale scenario, enter proceeds after counted selling costs. Use total rental receipts minus counted operating costs across the same holding period, including a negative amount when costs exceed receipts. Blank rental income produces a property-only scenario, not a complete net return.
Formula
Gain or loss = end-of-period property value or sale proceeds + total rental income after operating costs − initial investment. Total ROI = gain or loss / initial investment × 100. Equivalent annualised return = (((property value + net rental income) / initial investment)^(1 / years) − 1) × 100, when the combined amount is positive.
Worked example
Fictional example in one currency: initial investment of 105,000, sale proceeds of 112,000, total rental income after operating costs of 12,000 and five years give a gain of 19,000, total ROI of about 18.10% and equivalent annualised return of about 3.38%. The worksheets below show every counted amount.
What the estimate leaves out
Only entered amounts are counted. Unknown costs are not zero. The annualised figure combines property value and all rental income at the end of the period; it is not a dated cash-flow IRR or a reinvestment simulation. Financing, taxes, inflation and exchange-rate changes are not modelled separately. An unsold value is not realised cash. Future inputs are scenarios, not predictions.
Build a consistent investment and income worksheet
These invented amounts demonstrate the form, not an available property, market return or recommended investment. All money uses the same currency; no exchange conversion occurs. The five-year period is a modelling choice, not a forecast.
Separate the purchase and acquisition costs, the amount available on sale, and rent after operating costs. Do not add selling costs to the initial investment as well as subtracting them from proceeds. Do not deduct operating costs again if the rental income already includes them. Additional capital contributions require a dated cash-flow analysis rather than silently changing this initial basis.
| Worksheet item | Amount or period | How it is used |
|---|---|---|
| Purchase price | 100,000 | Whole property purchase price; no loan is modelled. |
| Counted acquisition costs | 5,000 | An arbitrary assumed amount, not a local fee schedule. |
| Initial investment, including acquisition costs | 105,000 | 100,000 + 5,000; this is the ROI denominator. |
| Sale price at the end of the period | 115,000 | An assumed sale amount, not a valuation prediction. |
| Counted selling costs | 3,000 | Deducted from sale price once, not added to initial investment. |
| End-of-period property value or sale proceeds | 112,000 | 115,000 − 3,000; enter this amount in the form. |
| Rental receipts over the entire period | 18,000 | Total receipts over five years, already reflecting any missed rent. |
| Counted operating costs over the entire period | 6,000 | Costs actually included in this fictional scope; no further vacancy deduction. |
| Total rental income after operating costs | 12,000 | 18,000 − 6,000; enter the holding-period total, not monthly rent. |
| Holding period (years) | 5 | The same period as the sale and rental amounts. |
Reproduce the result before comparing properties
The combined amount is 112,000 + 12,000 = 124,000. Subtract 105,000 to obtain the 19,000 gain. Dividing by 105,000 gives about 18.10% over the full five years. Applying the fifth root to 124,000 / 105,000 gives about 3.38% a year under the end-of-period convention.
Dividing 18.10% by five gives about 3.62%, which is a simple average, not the compounded equivalent annualised figure. This calculator does not know when the rent or expenses occurred. Receiving the same rent early or late therefore gives the same displayed result, although a dated cash-flow IRR can differ. No rental reinvestment is simulated.
| Result | Calculated amount | Interpretation |
|---|---|---|
| Combined property value and net rental income | 124,000 | Sale proceeds plus counted holding-period rental income. |
| Gain / loss (entered amounts) | 19,000 | 124,000 − 105,000; omitted costs remain outside this result. |
| Total ROI (entered amounts) | 18.095238% | 19,000 / 105,000 × 100; displayed as 18.10%. |
| Equivalent annualised return | 3.382368% | ((124,000 / 105,000)^(1 / 5) − 1) × 100; displayed as 3.38%. |
Include rental losses and identify missing inputs
Blank income leaves rent and operating costs out of the calculation. Entering 0 is a deliberate zero net-income scenario. The arithmetic can match, but the evidence and scope differ. A negative net rental amount is allowed when the operating costs you count exceed receipts.
The following variants retain the initial investment of 105,000 and five-year period. A non-positive combined property value and rental amount has no annualised result under this calculator convention; the gain or loss and total ROI remain visible. These extreme inputs demonstrate limits, not typical outcomes.
| Scenario | Property value; net rental income | Gain or loss; total ROI; annualised result |
|---|---|---|
| Income not supplied | 112,000; blank | 7,000; 6.67%; 1.30% — property-only scope. |
| Intentional zero net income | 112,000; 0 | 7,000; 6.67%; 1.30% — entered zero scenario. |
| Worksheet income | 112,000; 12,000 | 19,000; 18.10%; 3.38%. |
| Operating loss | 112,000; −5,000 | 2,000; 1.90%; 0.38%. |
| No property value and an operating loss | 0; −5,000 | −110,000; −104.76%; unavailable. |
Review costs and scope before using the comparison
FINRA explains total-cost and compounded annualisation concepts for investments, mainly using U.S. securities examples. ASIC Moneysmart identifies purchase, ownership and sale costs for Australian investment property. These sources support checking assumptions; their tax, fee and borrowing rules are not worldwide rules.
This form compares a whole-property initial basis with a whole-property value. A down payment paired with the whole sale value overstates a financed return because it ignores debt. Loan balances, repayments and additional contributions need a separate cash-flow model. Taxes and any unentered costs remain excluded; the result is not certified after-tax profit or personal investment advice.
- Record one currency, the holding period and whether the end value is an unsold estimate or sale proceeds.
- Count acquisition, selling and operating costs once and name the costs you have excluded or not yet established.
- Use actual rental receipts when known; do not deduct vacancy twice or treat a refundable tenant deposit as rental earnings.
- Keep the denominator consistent across properties; do not substitute a down payment for whole-property purchase cost.
- For cash-flow timing, financing, tax or further capital contributions, obtain a suitable dated model and relevant local advice.
Frequently asked questions
How do I calculate ROI on a rental property?
In this calculator, add end-of-period property value or counted sale proceeds to total rental income after counted operating costs, subtract the initial investment, then divide the gain or loss by that initial investment. The result includes only the amounts you supply.
Should I enter monthly rent or total rental income?
Enter the total for the entire holding period after the operating costs you count. Do not enter monthly rent or multiply receipts already covering the whole period again. A negative amount is allowed for an operating loss.
Where do buying and selling costs go?
Include counted acquisition costs with the purchase price in the initial investment. For a sale scenario, subtract counted selling costs from sale price before entering proceeds. Count each cost once; do not deduct it in one field and add it again in another.
Is annualised property ROI the same as IRR?
No. This form treats the property value plus all rental income as an end-of-period amount. It has no dated cash-flow inputs, so it cannot calculate a cash-flow IRR or simulate reinvestment of rent.
What happens if rental income is blank or negative?
Blank income produces a property-only scenario that excludes rental income and operating costs. Enter 0 only for a deliberate zero net-income scenario. A negative amount counts an operating loss; non-positive combined property value and income leaves annualisation unavailable while retaining the loss and total ROI.
Can I use my down payment as the investment amount?
Not with the whole property value in this form. The calculator does not separately deduct loan balances or model mortgage cash flows. Use a consistent whole-property basis here and a suitable financing model for a return on your own invested cash.