How This Calculator Works
Total ROI measures your return against the cash you actually invested, not the full purchase price — which is what makes it more useful than looking at capital growth alone when you've used a mortgage. The formula: Total ROI = (Capital Gain + Total Cashflow Return) ÷ Cash Invested. Capital gain is your current value minus purchase price; total cashflow return is your net monthly cashflow multiplied by months held. Annualised ROI then compounds that total return down to an equivalent yearly rate, so you can compare deals held for different lengths of time on a like-for-like basis.
Property ROI FAQs
What's the difference between ROI and rental yield?
Rental yield only measures rental income against purchase price. ROI is broader: it combines rental cashflow and capital appreciation, measured against the cash you actually invested (deposit, SDLT, legal fees, survey) rather than the full purchase price — so it reflects the real return on your money, including the effect of leverage.
What counts as "cash invested" for ROI?
The total cash you put in to acquire the property: deposit, stamp duty, legal fees, survey costs and any initial refurbishment — not the full purchase price if you used a mortgage. This is what makes ROI different from a simple capital-growth percentage.
Why is annualised ROI lower than total ROI?
Total ROI is the return over the whole holding period. Annualised ROI compounds that down to an equivalent yearly rate, which is always lower than the total ROI once you're holding for more than a year (assuming a positive return) — it's the fair way to compare a 2-year hold against a 10-year hold.
Does this ROI figure account for selling costs?
No — Current Value should be a realistic market valuation. If you're modelling an actual sale, deduct estate agent fees, legal costs and any outstanding mortgage balance separately using the Property Flip Calculator or Portfolio Disposal Calculator, which build those costs in directly.
Does ROI include mortgage paydown or equity build-up?
Not directly. This calculator uses your net monthly cashflow (already after mortgage payments) and current market value. It doesn't separately track how much mortgage capital you've paid down — compare your outstanding balance to your original loan amount if you want that figure as well.
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