Rental property ROI calculator

Frequently asked questions

Understanding your rental property ROI

Return on investment, or ROI, can help you understand how your rental property is performing financially. Unlike rental yield alone, ROI can provide a broader picture by considering the income your property generates alongside the money you've invested.

How do you calculate ROI on a rental property?

Rental property ROI compares the return generated by your investment with the amount you've invested. The calculation can include rental income and relevant property expenses to give you an estimated percentage return.

Using a rental property ROI calculator makes it easier to bring these numbers together and compare different investment opportunities.

What costs should you consider?

The purchase price isn't the only number that matters when assessing a rental property. Depending on your circumstances, costs could include rates, insurance, property management, maintenance, repairs and other ongoing expenses.

Considering these costs can give you a more realistic understanding of how your investment is performing.

What is a good ROI for a rental property?

There's no universal benchmark for a good rental property ROI. Returns can vary considerably depending on the property, location, financing, expenses and your investment objectives.

Rather than looking at ROI in isolation, consider it alongside rental yield, potential capital growth, ongoing costs and the level of risk you're comfortable with.

ROI or rental yield - which should I use?

Both can be useful. Rental yield provides a quick indication of the income a property generates relative to its value, while ROI can give you a broader view of the return on the money you've invested.

Together, they can help you build a clearer picture of your property's financial performance.