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How do I calculate the ROI on a rental property?

In AnyTool Property ROI Calculator, enter the purchase price, down payment, loan rate and term, monthly rent, a vacancy allowance and the operating expenses (property tax, insurance, maintenance, management, HOA). It works out net operating income (NOI = annual rent × (1 − vacancy) − operating expenses, before the mortgage), then the cap rate and net yield (NOI ÷ price × 100), the gross rental yield (annual rent ÷ price × 100), the monthly cash flow (rent − mortgage − expenses), and the cash-on-cash return (annual pre-tax cash flow ÷ cash invested × 100). Add an appreciation rate and a hold period and it projects value, equity, cash flow and a total ROI that folds in cash flow, mortgage principal paydown and appreciation. Everything updates live, entirely in your browser.

  • NOI = annual rent × (1 − vacancy) − operating expenses (excludes the mortgage)
  • Cap rate = net yield = NOI ÷ price × 100 (unlevered)
  • Cash-on-cash = annual cash flow ÷ cash invested × 100 (levered)
  • Gross yield = annual rent ÷ price × 100; cash flow = rent − mortgage − expenses
  • Total ROI over the hold = (cash flow + principal paydown + appreciation) ÷ cash invested

What is

Property / rental ROI (cap rate, cash-on-cash, rental yield)

Rental-property ROI is a family of metrics that measure the return on a buy-to-let investment. The cap rate (capitalisation rate) is net operating income divided by price (NOI ÷ price × 100), an unlevered measure of the property’s own yield; net rental yield is the same figure. Gross rental yield is annual rent ÷ price × 100, ignoring expenses and vacancy. Cash-on-cash return is the annual pre-tax cash flow (NOI minus mortgage payments) divided by the cash actually invested (down payment plus closing costs), the levered return on your out-of-pocket money. Total ROI over a hold period combines cash flow, the equity built as the mortgage’s principal is repaid, and appreciation, against the cash invested.

Calculators

Related terms

Cap rateCash-on-cash returnNet operating income (NOI)Gross rental yieldNet rental yieldCash flowAppreciation

Frequently Asked Questions

Cap rate is unlevered — NOI divided by price, ignoring the loan. Cash-on-cash is levered — annual cash flow after the mortgage, divided by the cash you actually invested.

Cap rate measures the property’s own yield regardless of how it is financed: net operating income divided by purchase price (NOI ÷ price × 100), where NOI excludes the mortgage. Two buyers comparing the same building get the same cap rate. Cash-on-cash return measures what your actual cash earns: annual pre-tax cash flow — NOI minus mortgage payments — divided by the cash invested (down payment plus closing costs). Because a mortgage lets you control a large asset with a small down payment, cash-on-cash is often higher than the cap rate when cash flow is positive (positive leverage), and lower or negative when the loan costs more than the property yields. AnyTool shows both side by side.

It varies by market and risk, but many investors look for cap rates roughly in the 5–10% range and cash-on-cash returns of about 8% or more — higher numbers usually mean higher risk or cheaper markets.

There is no universal threshold because returns trade off against risk, location and growth prospects. In expensive, low-risk metros cap rates can sit below 5%, while cheaper or higher-risk markets may show 8–10% or more. Many buy-and-hold investors target a cash-on-cash return around 8% or higher, but a lower cash-on-cash can still be a good deal if appreciation and principal paydown are strong, which is why AnyTool also projects a total ROI over your hold period rather than judging on yield alone. Use the numbers to compare opportunities against your own benchmark, not as a pass/fail line.

It is a pre-tax estimate — it ignores income tax on rental profit, depreciation and recapture, the costs of selling, interest-rate changes and local market risk, and it is not investment advice.

The cash flow and ROI shown are before tax: they do not deduct income tax on rental profit, and they ignore depreciation and the depreciation recapture you may owe on sale. The projection also excludes selling costs (agent commission, transfer taxes, legal fees), assumes one fixed interest rate for the whole hold with no refinancing, and treats appreciation, rent growth and vacancy as smooth annual rates when real markets are lumpy and carry local risk. Treat the result as one planning input, confirm tax treatment with a qualified accountant, and remember it is not investment, tax or financial advice.

Yes, it is free with no signup, and nothing is uploaded — every calculation runs in your browser and the page works offline.

AnyTool Property ROI Calculator is completely free with no account or limits, and all the math runs on a small, unit-tested engine entirely in your browser, so the figures you type are never sent to a server. The mortgage portion reuses the same reducing-balance engine as the EMI and Mortgage tools, you can switch between four display currencies, and the full result — cash flow, cap rate, cash-on-cash, yields and the multi-year projection — can be copied to your clipboard with one tap.

Detailed Explanation

Methodology

How the Property ROI Calculator Works

The calculator analyses a rental property from its price, financing, rent, vacancy and operating expenses. Effective rent = annual rent × (1 − vacancy). Operating expenses sum property tax, insurance, maintenance, management and HOA dues — but never the mortgage, because debt is financing, not an operating cost. Net operating income (NOI) = effective rent − operating expenses. From NOI it derives the cap rate (= net rental yield) = NOI ÷ price × 100, while gross rental yield = annual rent ÷ price × 100. The monthly mortgage payment comes from the shared reducing-balance loan engine; monthly cash flow = (effective rent − operating expenses − mortgage) ÷ 12; and cash-on-cash return = annual cash flow ÷ cash invested (down payment + closing costs) × 100. Every result is produced by a pure, unit-tested function and updates live as you type.

  • NOI = annual rent × (1 − vacancy) − operating expenses (mortgage excluded)
  • Cap rate = net yield = NOI ÷ price × 100 (unlevered)
  • Gross yield = annual rent ÷ price × 100
  • Monthly cash flow = (effective rent − expenses − mortgage) ÷ 12
  • Cash-on-cash = annual cash flow ÷ (down payment + closing costs) × 100
How It Works

Cap Rate vs Cash-on-Cash vs Total ROI — Three Different Returns

These metrics answer different questions and should be read together. The cap rate is unlevered: it divides NOI by price and ignores the loan, so it isolates the property’s own yield and lets two buyers compare a building regardless of how each finances it. Cash-on-cash is levered: it divides the annual cash flow after the mortgage by the cash actually invested, capturing the effect of leverage — it is usually higher than the cap rate when cash flow is positive (positive leverage) and lower or negative when borrowing costs exceed the property yield. Neither captures the full picture over time, which is why the tool also projects a total ROI over a chosen hold period that folds in the three ways a rental builds wealth: cash flow, the equity built as the mortgage’s principal is repaid (paydown), and appreciation, measured against the cash invested. A low-cash-flow property can still produce a strong total ROI through paydown and appreciation, and vice versa.

  • Cap rate is unlevered (ignores the loan); cash-on-cash is levered
  • Positive leverage: cash-on-cash > cap rate when cash flow is positive
  • Total ROI = cash flow + principal paydown + appreciation ÷ cash invested
  • A property builds wealth three ways: cash flow, paydown, appreciation
  • Read the metrics together, not in isolation
Limitations

What This Estimate Leaves Out — Taxes, Selling Costs and Market Risk

The figures are an honest model but a pre-tax planning estimate, not a guarantee. Cash flow and ROI do not deduct income tax on rental profit, and they ignore depreciation and the depreciation recapture that may be owed on sale. The projection excludes the transaction costs of selling (agent commission, transfer taxes, legal fees), assumes a single fixed interest rate for the whole hold with no refinancing or rate resets, and treats appreciation, rent growth and vacancy as smooth annual rates when real markets are lumpy and carry local risk — a downturn, a problem tenant or a special assessment can erase a year of cash flow. A purchase price of zero or less is rejected; the down payment is clamped to the price; and a negative cash flow or a loss is reported faithfully rather than as an error. Figures are rounded for display while full precision is used in the math. This tool is not investment, tax or financial advice; confirm tax treatment with a qualified accountant.

  • Pre-tax — excludes income tax, depreciation and recapture
  • Excludes selling/transaction costs and assumes a fixed rate
  • Appreciation, rent and vacancy are smooth annual assumptions
  • Negative cash flow / losses are shown faithfully, not as errors
  • A planning estimate for comparison — not investment advice
Privacy & Security

Privacy and Offline Use

Because all computation runs in the browser, the figures you enter are never sent to a server, there is no account or tracking, and the page works offline after first load. The mortgage portion reuses the same unit-tested reducing-balance loan engine as the EMI, Mortgage and Amortization tools, so the math is consistent across the suite. The full breakdown — monthly cash flow, cap rate, cash-on-cash, gross and net yield, the multi-year projection and the total ROI — can be copied to the clipboard with one tap, across four display currencies (₹, $, €, £).

Rental ROI analysis: in-browser (AnyTool) vs typical online rental calculators
CapabilityAnyToolTypical online rental calculators
ProcessingRuns in your browserOften server-side
Cap rate & net yieldShown (NOI ÷ price)Sometimes
Cash-on-cash returnShown (levered)Sometimes
Gross rental yieldShownOften missing
Multi-year projectionValue, equity, cash flow & total ROIOften year-1 only
Mortgage engineShared reducing-balance engineVaries / opaque
CurrenciesFour (₹ $ € £)Often one
Honest limitationsPre-tax, not advice — stated plainlyRarely stated
Cost / signupFree, no signupOften gated or ad-heavy

AnyTool computes every metric locally and uploads nothing. Comparison as of June 2026.