Real Estate ROI Calculator

Real Estate Return on Investment Calculator: Key Metrics & Formulas

1. Loan Amount

   $$\text{Loan Amount} = \text{Purchase Price} – \text{Down Payment}$$

2. Monthly Mortgage Payment (if you have a loan)

   $$\text{Monthly Payment} = \text{Loan Amount} \times \frac{r(1+r)^n}{(1+r)^n – 1}$$

   where:

   • $r = \frac{\text{Annual Interest Rate}}{100 \times 12}$
   • $n = \text{Loan Term (years)} \times 12$

   If $\text{Interest Rate} = 0$, the payment is simply $\frac{\text{Loan Amount}}{n}$.

3. Monthly Operating Expenses

   $$\text{Monthly OpEx} = \text{Base Monthly Expenses} + \frac{\text{Annual Property Tax} + \text{Annual Insurance} + \text{Annual Maintenance}}{12}$$

4. Monthly Net Rent (accounting for vacancies)

   $$\text{Monthly Net Rent} = \text{Monthly Rent} – (\text{Monthly Rent} \times \frac{\text{Vacancy Rate}}{100})$$

5. Monthly Net Cash Flow

   $$\text{Monthly Net Cash Flow} = \text{Monthly Net Rent} – \text{Monthly OpEx} – \text{Monthly Mortgage Payment}$$

6. Annual Net Cash Flow

   $$\text{Annual Net Cash Flow} = \text{Monthly Net Cash Flow} \times 12$$

7. Net Operating Income (NOI)

   $$\text{NOI (annual)} = (\text{Monthly Net Rent} – \text{Monthly OpEx}) \times 12$$

8. Cap Rate

   $$\text{Cap Rate} = \frac{\text{NOI}}{\text{Purchase Price}} \times 100$$

9. Cash on Cash Return

   $$\text{CoC Return} = \frac{\text{Annual Net Cash Flow}}{\text{Down Payment}} \times 100$$

   (Assuming the Down Payment is your main cash invested.)

10. Debt Service Coverage Ratio (DSCR)

    $$\text{DSCR} = \frac{\text{NOI}}{\text{Annual Mortgage Payment}}$$