Real Estate ROI Calculator
About this calculator
Free, instant, and backed by a CPA-led qualified intermediary — built for investors weighing a buy, a sale, or a 1031 exchange.
Free, instant, CPA-led QI
The tool is free, runs in your browser, and stores nothing you enter. Behind it is Universal Pacific, a qualified intermediary led by a CPA. When you sell and reinvest, we hold your exchange funds, prepare the documents, and keep your 45- and 180-day deadlines on the calendar so nothing slips.
What the calculator tells you
Enter your cash in, the rental income, and the expected exit and get your total ROI, the profit in dollars, and a simple annualized rate across the hold. It blends the gain on sale with income along the way, then measures both against the cash you actually committed.
How real estate ROI works
One ratio, a clear sense of what belongs in it, and an honest read on the annualized figure.
ROI vs. cap rate vs. cash-on-cash
These three answer different questions. The cap rate measures one year of income against the full price and ignores debt, so it compares properties. Cash-on-cash divides a year's after-mortgage cash flow by the cash you put in. ROI is the widest view: it folds the gain on sale together with income across the whole hold and divides by your total cash invested.
Use cap rate to shop, cash-on-cash to judge a single year, and ROI to size up a deal end to end.
What's included and excluded
This ROI counts the down payment, rehab, and closing as the cash invested. The return is the profit on sale, after selling costs, plus the net rental income over the hold. The sale profit compares your exit, less commission and closing, against the purchase price.
It leaves out income tax, depreciation recapture, and the timing of each cash flow. The rental income line is meant to be net of operating costs and the mortgage, so enter a figure you have already worked out, such as the result from the cash-flow calculator.
Simple vs. annualized return
Total ROI is the full return across the hold. Dividing it by the number of years gives a simple annualized rate: a 50% return over five years reads as 10% a year. It is easy to compute and easy to compare across deals of different lengths.
The catch is that it spreads the return evenly and ignores when money arrives. A property that gains most of its value in year one truly earned more than the simple figure suggests. For timing-sensitive decisions, an internal rate of return is the sharper tool.
Why the exit assumption drives the result
Most of the return in a buy-and-hold often comes from the sale, so the price you assume at exit moves the whole figure. Enter a sale price you can defend with local comparables, or use a modest appreciation rate rather than an optimistic one.
When you do sell and reinvest, a 1031 exchange can defer the tax on the gain. The 1031 exchange calculator estimates what you could keep working for you instead of paying out.
How it works
Five steps from your inputs to a return you can compare.
Enter your cash in
Add the purchase price, down payment, and rehab plus closing costs.
Add the income
Enter net rental income per year and how long you plan to hold.
Set the exit
Enter a sale price, or use an appreciation rate to project one.
Read the return
See total ROI, the dollar profit, and a simple annualized rate.
Plan the tax
Selling to reinvest? A 1031 exchange can defer the tax. Talk to a QI.
Frequently asked questions
The questions investors ask most about real estate ROI.
What is a good ROI on real estate?
There is no single benchmark, because ROI depends on how long you hold, how much leverage you use, and the risk of the deal. A useful test is whether the simple annualized return beats what the same cash would earn elsewhere at a comparable risk, after you account for the work involved. Always read ROI alongside the holding period and the assumptions behind the sale price, since a high total return over ten years may annualize to something modest.
How is ROI different from cap rate?
Cap rate measures a single year of net operating income against the full property price and ignores financing, so it is built for comparing properties. ROI is broader: it combines the profit on sale with rental income across the entire hold, then divides by the cash you actually invested, including the down payment and rehab. Cap rate is a snapshot of the property; ROI is the result of your whole investment, leverage and all.
Does this ROI include the mortgage?
Indirectly. The calculator measures the return against your cash invested rather than the full price, which is the effect of using a loan. The annual rental income you enter should already be net of the mortgage payment, so financing flows in through that figure. The calculator does not separately model loan paydown or interest, so for a year-by-year cash view, pair it with the cash-flow calculator.
What is the difference between simple and annualized ROI?
Total ROI is the entire return over the hold. Simple annualized ROI divides that by the number of years, so a 40% total return over four years reads as 10% a year. It is quick and lets you compare deals of different lengths, but it spreads the return evenly and ignores when the money actually arrived. An internal rate of return, or IRR, accounts for that timing and is more accurate when cash flows are uneven, though it is harder to compute by hand.
Should I use a sale price or an appreciation rate?
Use a sale price if you have a defensible number from local comparables or a planned exit. Use an appreciation rate when you are testing assumptions; the calculator compounds the rate over your holding period to project a sale price. Either way, the exit assumption drives most of the result in a buy-and-hold, so lean conservative. A modest rate you can defend beats an optimistic one that flatters the return.
Can I defer the tax on my ROI when I sell?
The gain itself is generally taxable, but a 1031 exchange lets you defer capital gains tax and depreciation recapture by reinvesting the proceeds into another investment property. You identify a replacement within 45 days and close within 180, with a qualified intermediary holding the funds in between. Deferring the tax keeps more capital compounding in your next property. The 1031 exchange calculator estimates what you could defer, and our team can set up the exchange.
Selling to reinvest your return?
Run the ROI, then keep more of the gain working for you. A 1031 exchange can defer the tax when you sell one property and reinvest in another. Universal Pacific sets up the exchange, holds the funds, and tracks every deadline with you.
Contact our team