Is that rental property actually a good investment? This free rental property ROI calculator uses your cash invested, monthly rent and expenses to find your cash-on-cash return – one of the clearest ways to judge a rental’s performance.
Include mortgage payment, tax, insurance, maintenance reserve and management in monthly expenses.
This measures cash-on-cash return only, not total return including appreciation, tax benefits or principal paydown.
How Rental Property ROI Calculator Works
Cash-on-cash return measures how hard the actual cash you put into a rental property is working for you, compared to the cash it hands back each year. The rental property ROI calculator finds your monthly cash flow first, then scales it up to compare against your total cash invested.
Formula: Monthly Cash Flow = Monthly Rent − Monthly Expenses. Annual Cash Flow = Monthly Cash Flow × 12. Cash-on-Cash ROI = (Annual Cash Flow ÷ Cash Invested) × 100%
- Cash invested — your down payment plus closing costs, i.e. the actual cash you put into the deal, not the full purchase price
- Monthly rent income — the rent you collect each month
- Monthly expenses — all-in monthly costs, including mortgage payment, property tax, insurance, a maintenance reserve, and management
- Monthly cash flow — rent minus expenses, calculated rather than entered directly
- Cash-on-cash ROI — the headline output, annual cash flow as a percentage of cash invested
Example Scenarios
| Cash Invested | Monthly Rent | Monthly Expenses | Cash-on-Cash ROI |
|---|---|---|---|
| $60,000 | $2,200 | $1,700 | 10.0% |
| $100,000 | $3,000 | $2,200 | 9.6% |
| $40,000 | $1,800 | $1,500 | 9.0% |
| $80,000 | $2,500 | $2,100 | 6.0% |
| $50,000 | $1,600 | $1,750 | -3.6% |
Rental Property ROI Calculator FAQ
What should I include in “monthly expenses”?
Include the full mortgage payment (principal and interest), property tax, insurance, a maintenance reserve for repairs, and any property management fee. Leaving out any of these will inflate your cash flow and overstate your ROI.What exactly counts as “cash invested”?
It’s the down payment plus closing costs — the actual out-of-pocket cash you spent to acquire the property — not the full purchase price. If you financed most of the deal, this number is typically much smaller than the property’s value.What’s considered a good cash-on-cash ROI for a rental property?
There’s no single universal target — it depends on your market, financing terms, risk tolerance, and what other investments you’re comparing against. A positive figure means the property returns cash on top of your investment each year; a higher figure means a faster cash payback.Does cash-on-cash ROI include property appreciation?
No. This measures cash flow return only. It excludes appreciation, the tax benefits of depreciation, and the equity you build through mortgage principal paydown, all of which contribute to total return but not to cash-on-cash ROI specifically.What does a negative cash-on-cash ROI mean?
It means your monthly expenses exceed your rental income, so the property is costing you cash out of pocket every month rather than generating it, even before counting appreciation or equity gains.How is cash-on-cash ROI different from cap rate?
Cap rate compares a property’s net operating income to its purchase price or value, ignoring financing entirely. Cash-on-cash ROI instead compares cash flow to the actual cash you invested, which makes it sensitive to how the deal is financed.Related Calculators
Before buying, it helps to run the numbers through the rent vs buy calculator and the mortgage calculator to nail down your expected monthly payment. Don’t forget to also check the closing cost calculator so your cash invested figure reflects the true upfront cost of the deal.