Total ROI
76.7%
Annualized ROI
7.7%
Total Return
$276,371
What is a good ROI on rental property?
A good ROI for rental property in the US typically ranges from 8% to 12% annually, though this depends on the market and property type. Cash-on-cash returns of 8-10% are considered solid, while total ROI including appreciation can be higher. Many investors target a minimum of 1% rent-to-price ratio (monthly rent = 1% of purchase price) as a quick screening rule.
What is cap rate?
Capitalization rate (cap rate) is the ratio of net operating income (NOI) to property value, expressed as a percentage. It measures the property's return independent of financing. Cap rates of 4-6% are common in major metros, while 7-10%+ can be found in smaller markets. Lower cap rates often indicate lower risk but also lower returns.
How does appreciation affect ROI?
Property appreciation can significantly boost total ROI. Historically, US residential real estate has appreciated about 3-5% annually on average, though this varies widely by market. When combined with rental income, appreciation can double or triple total returns over long holding periods. However, appreciation is not guaranteed and should be viewed as a bonus rather than the primary return.
Note: This calculator provides estimates and does not account for financing costs, tax benefits (depreciation), or vacancy. Actual returns will vary. Consult a real estate professional or financial advisor.
Disclaimer: This calculator provides estimates based on current IRS rates and thresholds for the 2025 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your filing status, state of residence, deductions, and individual circumstances. Always consult a qualified tax professional or CPA before making financial decisions. Read our terms
This calculator uses official rates and thresholds from:
- IRS Publication 527 — Residential Rental Property
- IRS Publication 946 — How to Depreciate Property (MACRS)
- IRS Topic 409 — Capital Gains and Losses
Last verified: March 2026 · Tax year 2025. Results are indicative — consult a qualified accountant for personalised advice.