Landlord ROI Calculator
Calculate your total return as a landlord -- including cash flow, equity paydown from mortgage amortization, and property appreciation.
Why Landlord Returns Outperform Cash Flow Alone
New landlords often evaluate rental properties purely on monthly cash flow. Experienced investors know that cash flow is just one of three wealth-building engines. Consider a $380,000 rental purchased with $76,000 down at 7.2%: it might generate only $400/month in positive cash flow ($4,800/year). Evaluated on cash flow alone, that is only a 6.3% return on the $76,000 down payment.
But add the full picture: after 3 years at 3.5% appreciation, the property has gained about $42,000 in value. The mortgage paydown (principal reduction over 3 years) adds another $8,000-$10,000 in equity. Total 3-year return: $4,800 + $10,000 (equity) + $42,000 (appreciation) = approximately $56,800 on a $91,400 investment (down + closing costs). That is a 62% total return over 3 years, or about 18% annualized -- dramatically outperforming the cash flow metric alone. This is why holding well-selected rental properties remains one of the most effective long-term wealth building strategies.