Real Estate

Rental Property ROI

Calculate total return on a rental property including cash flow and appreciation.

Total return on a rental property includes cash-on-cash return (annual cash flow / cash invested) plus equity appreciation. This calculator combines both to show your blended annual return.

Enter your numbers

Purchase Price ($)

Down Payment ($)

Monthly Rent ($)

Monthly Expenses (non-mortgage) ($)

Monthly Mortgage Payment ($)

Annual Appreciation (%)3%

Results update as you change the inputs. Calculations run in your browser.

Total Annual ROI

9.7%

cash On Cash: -5.3%
annual Cash Flow: $-4800
appreciation Value: $13500/yr (estimate)

See the formula

Formula and method

ROI = (Annual Cash Flow + Annual Appreciation) / Down Payment × 100

Cash flow is rent minus all expenses including mortgage. Appreciation is estimated from the entered annual rate applied to purchase price. Total ROI combines both divided by initial equity (down payment).

Worked examples

Positive cash flow property

Purchase Price ($):: 380000
Down Payment ($):: 76000
Monthly Rent ($):: 2600
Monthly Expenses (non-mortgage) ($):: 600
Monthly Mortgage Payment ($):: 1700
Annual Appreciation (%):: 4

Total Annual ROI: 24.7%

Negative cash flow appreciation play

Purchase Price ($):: 750000
Down Payment ($):: 150000
Monthly Rent ($):: 3000
Monthly Expenses (non-mortgage) ($):: 900
Monthly Mortgage Payment ($):: 3400
Annual Appreciation (%):: 5

Total Annual ROI: 14.6%

Assumptions and limits

Appreciation applied to full purchase price annually
No rental income increases modeled
Mortgage payment is fixed

This tool provides an educational estimate. Rules, rates and personal circumstances can change the answer. Review the assumptions before relying on a result. Report a correction.

Common mistakes to avoid

Counting mortgage principal paydown as a return — while it builds equity, it is not cash flow.
Being too optimistic with appreciation — historical Canadian average is 3-5% annually but with significant volatility.
Not accounting for capital expenditures (roof, HVAC, appliances) in long-term projections.

Frequently asked questions

What is cash-on-cash return?

Cash-on-cash return measures actual cash income relative to the cash you invested (down payment + closing costs). It is the most practical measure of rental property performance year-to-year.

Should I include the tax benefits in ROI?

For a complete picture, yes. Rental property owners can deduct mortgage interest, property tax, maintenance, management fees, and depreciation. These can significantly improve after-tax returns.