Real Estate ROI Calculator
This calculator provides multiple industry-standard metrics to evaluate a prospective rental or investment property: Cap Rate, Cash-on-Cash return, Total Return over a holding period, and an approximate annualized return. Use conservative, verified inputs for reliable results.
The tool is intended for preliminary analysis and comparison. It assumes level annual cash flows (no rent growth or staged expenses unless you modify inputs) and provides an approximate IRR using a geometric average method rather than a full cash-flow IRR solver.
Governance
Record 93b235d6f97c • Reviewed by Fidamen Standards Committee
Annual pre-tax cash return relative to cash invested (down payment + closing costs).
Inputs
Results
Cash-on-Cash Return
24.44%
Annual Cash Flow
$16,130.00
Total Cash Invested
$66,000.00
| Output | Value | Unit |
|---|---|---|
| Cash-on-Cash Return | 24.44% | % |
| Annual Cash Flow | $16,130.00 | USD |
| Total Cash Invested | $66,000.00 | USD |
Visualization
Methodology
Calculations use standard formulas: Cap Rate = NOI / Purchase Price; Cash-on-Cash = Annual Cash Flow / Cash Invested; Total Return = (Cumulative Cash Flow + Net Sale Proceeds) / Cash Invested. Approximate IRR is computed as the CAGR (geometric mean) of total return across the holding period.
For financing, the monthly mortgage payment is calculated using the standard amortizing loan formula. Remaining loan balance at sale is estimated using the standard amortization balance formula after the number of payments made.
This product follows secure data handling and numerical best practices. For data security and handling guidance, see NIST Cybersecurity Framework and ISO 27001. For numeric stability and representation, consult IEEE 754 floating-point recommendations where applicable. Always cross-check material assumptions and rounding for compliance with local regulations and audit standards.
Key takeaways
Use this calculator for side-by-side comparisons and initial underwriting. It is not a legal, tax, or accounting tool.
For final underwriting, perform a full discounted cash flow and consult a licensed accountant or financial advisor. Consider obtaining professional appraisal and inspection reports before purchase.
Worked examples
Example: A $300,000 property with $2,000/month rent, 5% vacancy, $3,000 annual operating expenses, 30-year loan at 4.5% and $60,000 down. The tool will show estimated NOI, annual cash flow, cash-on-cash return, cap rate, and projections assuming a 5-year hold and specified appreciation and selling costs.
Use lower assumed rents and higher expense reserves for conservative scenarios; run sensitivity checks by varying vacancy, rent, and CapEx.
F.A.Q.
Does this calculate tax effects and depreciation?
No. This tool provides pre-tax operating metrics. Tax treatment, depreciation, and personal tax rates are not included and should be assessed with a tax professional.
Is the IRR exact?
No. The IRR provided is an approximation using geometric average (CAGR-style). For precise IRR, perform a cash-flow-based IRR or XIRR calculation using exact timing of inflows and outflows.
How accurate are the mortgage and balance calculations?
Mortgage payment and remaining balance formulas use standard amortization mathematics. Results depend on the accuracy of inputs. Round-off and floating-point representation conform to common numeric practice; for mission-critical uses, validate with lender amortization schedules.
Can I model graduated rent growth or changing expenses?
This version assumes level annual cash flows. For multi-stage or year-by-year modeling, export assumptions and use a cash-flow model or dedicated pro-forma tool.
How should I treat CapEx and reserves?
Treat CapEx as an annual reserve that reduces annual cash flow. For major planned repairs, model them as one-time costs in a pro-forma.
What are the main limitations?
Limitations include pre-tax outputs, no month-by-month cash-flow timeline, geometric IRR approximation, and single-scenario assumptions. Always perform sensitivity analysis and consult professionals for investment decisions.
Sources & citations
- NIST Cybersecurity Framework — https://www.nist.gov/cyberframework
- ISO/IEC 27001 (Information security management) — https://www.iso.org/isoiec-27001-information-security.html
- IEEE Standard for Floating-Point Arithmetic (IEEE 754) — https://standards.ieee.org/standard/754-2019.html
- Occupational Safety and Health Administration (OSHA) — https://www.osha.gov
- HUD — FHA Single Family Housing Policy Handbook 4000.1 — https://www.hud.gov/program_offices/housing/sfh/handbook_4000-1
- HUD — Property Valuation and Appraisals (HUD 4155.2) — https://www.hud.gov/sites/documents/4155-2_4.pdf
- Fannie Mae — Selling Guide — https://selling-guide.fanniemae.com/
Further resources
Versioning & Change Control
Audit record (versions, QA runs, reviewer sign-off, and evidence).
Record ID: 93b235d6f97cWhat changed (latest)
v1.0.0 • 2025-11-22 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Public QA status
PASS — golden 25 + edge 120
Last run: 2026-01-23 • Run: golden-edge-2026-01-23
Versioning & Change Control
Audit record (versions, QA runs, reviewer sign-off, and evidence).
What changed (latest)
v1.0.0 • 2025-11-22 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Public QA status
PASS — golden 25 + edge 120
Last run: 2026-01-23 • Run: golden-edge-2026-01-23
Engine
v1.0.0
Data
Baseline (no external datasets)
Content
v1.0.0
UI
v1.0.0
Governance
Last updated: Nov 22, 2025
Reviewed by: Fidamen Standards Committee (Review board)
Credentials: Internal QA
Risk level: low
Reviewer profile (entity)
Fidamen Standards Committee
Review board
Internal QA
Entity ID: https://fidamen.com/reviewers/fidamen-standards-committee#person
Semantic versioning
- MAJOR: Calculation outputs can change for the same inputs (formula, rounding policy, assumptions).
- MINOR: New features or fields that do not change existing outputs for the same inputs.
- PATCH: Bug fixes, copy edits, or accessibility changes that do not change intended outputs except for previously incorrect cases.
Review protocol
- Verify formulas and unit definitions against primary standards or datasets.
- Run golden-case regression suite and edge-case suite.
- Record reviewer sign-off with credentials and scope.
- Document assumptions, limitations, and jurisdiction applicability.
Assumptions & limitations
- Uses exact unit definitions from the Fidamen conversion library.
- Internal calculations use double precision; display rounding follows the unit's configured decimal places.
- Not a substitute for calibrated instruments in regulated contexts.
- Jurisdiction-specific rules may require official guidance.
Change log
v1.0.0 • 2025-11-22 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Areas: engine, content, ui • Reviewer: Fidamen Standards Committee • Entry ID: 7ad755eb2831
- https://selling-guide.fanniemae.com/
- https://standards.ieee.org/standard/754-2019.html
- https://www.hud.gov/program_offices/housing/sfh/handbook_4000-1
- https://www.hud.gov/sites/documents/4155-2_4.pdf
- https://www.iso.org/isoiec-27001-information-security.html
- https://www.nist.gov/cyberframework
- https://www.osha.gov