Property ROI Calculator
Total return on a property: rental profit plus capital growth, and the annualised rate.
A property returns money in two ways: the rent left after costs, and the change in the value of the building. Either one alone tells half the story, and the annualised figure is what makes a five-year property comparable with any other investment.
Enter what you put in, what it cost you along the way, the rent you received, the sale price and how long you held it, and this calculator gives the total return, the split between income and growth, and the yearly rate.
At a glance
- What you enter
- Purchase price, Purchase costs, Cash you put in, Monthly rent received, Annual costs paid, Years held, Sale price, Selling costs
- What you get
- Total profit, Total return, Annualised return, Share of profit from rent, Capital gain, Profit from rent
- Formula shown
- Yes - every step, right below your results.
- Cost and privacy
- Free, no account needed, and nothing you type is stored.
See worked examples ↓ Read the FAQ ↓ Share this calculator ↓
Results are estimates for general information only - always verify with a professional or official source before acting on them.
How to use the Property ROI Calculator
- 1 Enter Purchase price
- 2 Enter Purchase costs
- 3 Enter Cash you put in - The deposit plus the purchase costs, if you funded them from your own money.
- 4 Enter Monthly rent received
- 5 Enter Annual costs paid - Mortgage payments, service charge, insurance, maintenance, management, tax.
- 6 Enter Years held (years)
- 7 Enter Sale price
- 8 Enter Selling costs - Agent commission, legal fees, taxes on the sale.
- 9 Press Calculate. You get Total profit, Total return, Annualised return, Share of profit from rent, Capital gain, Profit from rent, and every intermediate step stays visible under “How is this calculated?”
- 10 Change one number at a time to see what moves the result - that is usually the most useful thing a calculator can tell you.
Worked examples
Real numbers run through this calculator. Open any example to load it into the form above and change it.
A $250,000 property bought and sold five years later
Rent of $1,500 a month against $9,000 of annual costs and a $50,000 gain in value.
You enter
- Purchase price
- $250,000.00
- Purchase costs
- $15,000.00
- Cash you put in
- $50,000.00
- Monthly rent received
- $1,500.00
- Annual costs paid
- $9,000.00
- Years held
- 5 years
- Sale price
- $300,000.00
- Selling costs
- $9,000.00
You get
- Total profit
- $86,000.00
- Total return
- 132.3%
- Annualised return
- 18.4%
- Share of profit from rent
- 52.3%
- Capital gain
- $50,000.00
- Profit from rent
- $45,000.00
The $50,000 gain in value plus $90,000 of rent, minus $45,000 of holding costs and $9,000 of selling costs, is a total profit of $86,000 on $65,000 of cash invested. That is a total return of 132.3% and an annualised return of 18.4%. Rent produced $45,000 of the profit and the change in value produced $50,000, so income is 52.3% of the total and the property grew 20% in value over the five years.
A $320,000 property held for eight years in a flat market
A property that returns mostly through rent, with only a 6.25% gain in value.
You enter
- Purchase price
- $320,000.00
- Purchase costs
- $18,000.00
- Cash you put in
- $80,000.00
- Monthly rent received
- $1,750.00
- Annual costs paid
- $12,000.00
- Years held
- 8 years
- Sale price
- $340,000.00
- Selling costs
- $12,000.00
You get
- Total profit
- $80,000.00
- Total return
- 81.6%
- Annualised return
- 7.7%
- Share of profit from rent
- 90.0%
- Capital gain
- $20,000.00
- Profit from rent
- $72,000.00
The $20,000 gain plus $168,000 of rent, minus $96,000 of holding costs and $12,000 of selling costs, is a total profit of $80,000 on $98,000 invested. That is a total return of 81.6% and an annualised return of 7.7%. Rent supplied $72,000 of the profit and the change in value supplied $20,000, so income is 90.0% of the total, and the property grew only 6.25% in value across the eight years.
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Frequently asked questions
Does the return include the rent, or only the increase in value?
Both are counted. The total profit is the change in value plus the rent received, minus the annual costs of holding the property and the cost of selling it. The income share line splits the profit between the two, so you can see how much of the return came from the tenant rather than from the market.
If the property broke even on rent over the period, the income share reads zero or below and the entire profit is capital growth, which is a different risk from a property that pays you something every month.
Why is the annualised return so much lower than the total return?
Because the total is not divided by the years, it is converted into a yearly rate by compounding. The formula takes one plus the total return, raises it to the power of one over the holding period, and subtracts one. A $65,000 investment that becomes $151,000 over five years is a total return of 132%, which compounds to about 18.4% a year rather than the 26% a simple division would suggest.
The annualised figure is the one to compare with any other use of the money, because it puts a five-year property and a nine-month project on the same footing.
Which costs belong in the annual costs field?
Everything you pay to hold the property for a year: mortgage payments, service charge or ground rent, insurance, maintenance and repairs, letting and management fees, and any property tax you pay. Selling costs are a separate field because they happen once at the end rather than every year.
Work that improves the property rather than maintaining it is capital spending, so it belongs in the purchase price or in the annual costs depending on when it happened. What matters is that no recurring cost is left out and that nothing is counted twice.
Is tax on the rent or on the sale included?
No. The calculation is before tax. Income tax on the rent and any tax on the gain when you sell are not deducted, and over several years they can take a significant part of the return. Add them to the annual costs and the selling costs if you know the figures.
Because the rules depend on where you live, on your other income and on how the property is owned, the honest approach is to run it twice: once before tax to see whether the investment works at all, and once after tax to see what you keep.
Terms used here
Short, plain-language definitions of the words this calculator uses.