Investors calculate return on investment (ROI for short) in different ways, but for rental properties, the three most important measures of returns are monthly cash flow, annual yield, and cap rates. We also recommend including property management expenses, even if you’re managing the rental unit yourself - your time has value, too! Most landlords ignore CapEx at their own peril. But we recommend including a vacancy rate of at least 6% and significant annual repair and maintenance expenses. Start playing around with it! Enter numbers and see what happens. And not just obvious costs like property taxes and landlord insurance, but the nagging expenses that pop up periodically in the real world: vacancy rates, ongoing maintenance and repairs, property management fees. Our rental income calculator accounts for both your up-front investment (down payment, closing costs, initial renovations) and your ongoing costs. If you want strong ROI, you need to keep your eyes on the prize. As the old saying in business goes, that which gets measured, gets done. We put together this nifty rental property calculator to help you measure success. Thinking about buying a new rental property? Or just want to check up how your existing rental unit is performing?
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