Real estate ROI calculator guide
This tool estimates property investment return after purchase costs, selling costs, repair costs, rental income, and operating expenses.
How to use it
- Enter purchase and expected sale price.
- Add the holding period and annual rental income.
- Include expenses, transaction costs, and renovation costs.
- Review both total ROI and annualized return.
Calculation method
ROI = total profit ÷ total invested cost
Annualized return converts the total return into a yearly growth rate, making it easier to compare with stocks, ETFs, or other properties.
Example scenario
A property can show a strong sale gain but still deliver weaker ROI if buying costs, selling commissions, repairs, and expenses are ignored.
FAQ
Should mortgage payments be included?
This calculator focuses on asset-level ROI. For cash-flow analysis with financing, use the rental yield calculator and include mortgage payments.
Why include selling costs?
Selling commissions and closing costs can materially reduce the final return.
What is annualized return?
It is the yearly return rate that would produce the same total result over the holding period.