Residential Property ROI Calculator

This calculator will compute several important factors for determining the potential and viability of an existing or proposed residential income property. Factors calculated include: DSCR (Debt Service Coverage Ration), NOI (Net Operating Income), NIM (Net Income Multiplier), CAP (Capitalization Ratio), and more.

Property Information Help & Instruct
Purchase Price: To recieve help and/or instructions on any given line item, click inside the adjacent entry field.

Down Payment: %
Loan Term (Years):
Interest Rate (%):
Payment Type (Select P & I or Interest-Only):
P & I Payment ($):
Closing Costs ($):
Gross Scheduled Income (GSI):
Vacancy Rate (%):
Number of Units:
Other Income (Annual laundry, late fees, etc.):
Capitalization Rate Required (Optional):
Annual Opertating Expenses Help & Instruct
Accounting ($): To recieve help and/or instructions on any given line item, click inside the adjacent entry field.

Admin/Legal/Bank Charges ($):
Advertising ($):
Electricity ($):
Elevator ($):
Gas ($):
Landscaping ($):
Legal ($):
Maintenance & Repair ($):
Payroll Taxes ($):
Permits & Licenses ($):
Pest Control ($):
Pool ($): To recieve help and/or instructions on any given line item, click inside the adjacent entry field.

Property Insurance ($): %
Property Management ($): %
Real Estate Taxes ($): %
Security ($):
Supplies ($):
Telephone ($):
Tenant buyout ($):
Trash ($):
Water ($):
Other ($):
Other ($):
Income Statement & Cash Flow Explanations
Gross Scheduled Income (GSI): For an explantion of any result, click in the adjacent result field.

Less Vacancy:
Total Actual Annual Income:
Other Income:
Gross Operating Income (GOI):
Total Operating Expenses:
Net Operating Income (NOI):
Annual Debt Service (Mortgage Payments):
Before Tax Cash Flows:
Key Operating Ratios Explanations
Capitalization Rate (CAP): For an explantion of any result, click in the adjacent result field.

Cash on Cash (COC):
Gross Rent Multiplier (GRM):
Net Income Multiplier (NIM):
Debt Coverage Ratio (DCR):
Expense Ratio (ER) per Unit :
Price Per Unit:
Property Value Based on Required CAP Rate (if entered):

Residential Property Analysis

Anyone interested in investing in real estate is aware of the utmost important of the ROI (Return On Investment) that is the rewarded of the savvy work of the investor. Very simply, the ROI represents the percentage of original monies that are given back to the investor in question, from which any and all associated expenses of the investment have been deducted. This figure is acquired by subtracting the costs of the investment from the gain of the investment and placing it over the initial cost of the investment to get an appropriate percentile.

What Makes Up the ROI

However, there is much more to this equation than meets the eye. The factors that go into making up the costs of the investment versus the gain of the investment are myriad. Prospective investors and homeowners will need to keep careful track of all records, receipts, bills of sale, and miscellaneous documentation that are relevant to the real estate and the parties involved. These variables – including things like landscaping charges, maintenance and repair, property insurance and water bills – serve the purpose of making the ROI either very simple or extremely complex, depending on how much financial dealings have been recorded. If additional events occur, such as a refinancing of a loan, a second mortgage getting taken out, or an increase in property taxes, the scenario can get even more convoluted as rates fluctuate.

Two Ways to Calculate ROI

Although there are a couple of different methods of calculating ROI, the one that real estate investors tend to use is the out of pocket calculation as it employs the use of leverage such as a loan to raise the ROI. Using this method, you can get the ROI by dividing the value of the property minus the costs you put into the property by the value of the property. In other words, if you were to calculate the ROI of a home that was worth $50,000 but you only paid a $10,000 down payment for it with a financing loan, as well as another $40,000 in repairs, the new value of the improved home might add up to $100,000. Your total out of pocket expense would be $60,000. With the new value of the home at $100,000, your equity position would be $40,000. Divide this by the new property value, and you will find that your ROI is equal to .4 or 40%.

ROI Calculator and Its Outputs

The extensive options and customizations that are included in this calculator will allow you to assess what you can expect to see from your current or anticipated investments in a purchased real estate property. In this case, the Debt Coverage Service Ratio figure will give you a clue as to whether your property will be capable of sustaining the amount of its debt based on the financial flow. If there is not enough cash flow to pay for loan bills, the DCSR will be less than 1, but if it is over 1 this indicates that there is enough cash on hand to cover the costs of principal and interest payments. The Net Operating Income, a figure derived from the Gross Operating Income and the Operating Expenses, will give you a good idea of the pre-interest, pre-tax picture of the property's performance. The Capitalization Ratio and the Net Income Multiplier, on the other hand, are very similar statistics, both calculated results of the Net Operating Income and the investor's purchase price of the property.