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For rentals you already own

Rental Property Return on Equity Calculator

See what your rental earns on the equity you have in it today. Separate cash flow from mortgage paydown and assumed appreciation.

Free calculations. No account needed.

Edit assumptions

Property & current loan
$
iUse a current estimate, not the price originally paid.
$
iPrincipal still owed. Enter 0 for a paid-off property.
%
iNote rate. Taxes and insurance belong in operating costs.
years
iUse the remaining term, not the original term. Half a year is 6 months.
Rental income & costs
$/month
iTotal rent before vacancy.
% of rent
iExpected share of rent not collected.
$/year
iTaxes, insurance, management, routine repairs and owner-paid costs. Exclude vacancy, mortgage and replacement reserves.
$/year
iMoney set aside for replacements. Spending below uses this reserve first; unspent reserves remain cash. Exclude both from operating costs.
$/year
iAnnualized spending on replacements. Paid from the reserve first; any shortfall reduces available cash flow. Unspent reserves remain cash in the final comparison.
Future assumptions
years
iAll paths use the same horizon, up to 30 whole years.
%/year
iYour assumption, not a market forecast.
%/year
iApplied to operating costs, reserve contributions and major-repair spending.
%/year
iShown separately from cash returns. Can be negative.
% of sale price
iBrokerage, settlement and other sale costs. Income taxes are separate.
%/year
iApplies to sale proceeds, refinancing cash and annual cash flows. Set 0 if cash is held without a return.
Refinancing option
$
iTotal new principal, including costs only if they are financed.
%
iUse a lender quote; no current rates are supplied.
years
iWhole years.
$
iAll fees and points. Deducted once from the cash released, including when financed.

Annual cash return on current equity2.28%Cash flow after costs, reserves and mortgage
Current equity$150,000Property value minus mortgage balance
Total return on current equity11.17%Includes principal, appreciation and unspent reserves

What makes up the return?

Year 1 componentAmount
Cash flow after costs, reserves & mortgage$3,417
Principal repaid (noncash)$4,342
Assumed appreciation (noncash)$9,000
Unspent reserves retained$0

The denominator is $150,000 of current equity, before selling costs and income tax. This is not an annualized holding-period return.

Compare keeping versus selling or review a refinancing option.

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Save dated reviews, compare changed assumptions and include your own tax estimates with Plus. $10/month. Saved reviews stay readable after cancellation.

See Plus

How the comparison works

Cash return divides annual cash flow by current property value minus mortgage debt. The broader return also includes principal repaid and your assumed appreciation. Neither is the return on your original down payment.

What is included?

Rent after vacancy, operating costs, replacement reserves, mortgage principal and interest, your growth assumptions, sale costs and debt payoff. Annual cash flows are invested at year end. Cash released today is invested immediately. The model assumes fixed-rate fully amortizing loans and no new borrowing beyond the refinancing option.

What should I verify?

Use actual loan balances and quotes. Taxes, insurance, repairs and rent changes may differ from these assumptions. The tool does not model adjustable-rate or interest-only loans, lender eligibility, balloon payments, prepayment penalties or returns on a specific investment. Before-tax results exclude income taxes; the optional Plus comparison subtracts only your entered tax estimates.

Questions

Why can cash-on-cash look good while return on current equity is low?

Cash-on-cash uses the cash invested when you bought. Current equity changes as the property value and mortgage balance change. Review both cash and noncash components before comparing alternatives.

Does appreciation pay my expenses?

No. Appreciation and principal paydown increase property equity without putting cash in your bank account. The cash-return figure excludes them.

Can I use this for a property I might buy?

Use the rental property analyzer for down payment, closing costs, purchase cash-on-cash returns and acquisition tax scenarios. These tools start with a property you already own.