Free Underwriting Tool

Real Estate ROI Calculator

Project your total return on equity over 5 and 10-year holding periods. Factor in appreciation compounding, leverage, and cumulative rental cash flow.

Leveraged Real Estate ROI Engine

Calculates compounding equity, capital appreciation, and cumulative cash flows

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Net post-mortgage annual cash flow

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Historical US avg: 3.5%–4.5%

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Inflation projection: ~3.0%

5-Year Return on Invested Capital
126.8%Total ROI
Initial Equity Invested:$92,000
5-Year Value Growth:+$86,661
5-Year Cumulative Cash Flow:+$30,000
Total 5-Yr Wealth Created:+$116,661
Property value in Year 5: $486,661 (at 4% annual appreciation).
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10-Year Equity & Cash Flow Projection

YearProperty ValueAnnual Cash Flow (NOI)Appreciation ReturnEquity Gain
Year 1$416,000$6,180+4%+$16,000
Year 2$432,640$6,365+8.16%+$32,640
Year 3$449,946$6,556+12.49%+$49,946
Year 4$467,943$6,753+16.99%+$67,943
Year 5$486,661$6,956+21.67%+$86,661
Year 6$506,128$7,164+26.53%+$106,128
Year 7$526,373$7,379+31.59%+$126,373
Year 8$547,428$7,601+36.86%+$147,428
Year 9$569,325$7,829+42.33%+$169,325
Year 10$592,098$8,063+48.02%+$192,098

The 5-Year Return on Equity Formula

5-Year ROI = [(5-Year Appreciation + Cumulative Cash Flow) ÷ Initial Equity Invested] × 100

Where Initial Equity Invested = Down Payment + Closing Costs

Haven Underwriting Methodology

Transparent Financial Modeling

Haven uses audited formulas documented in our methodology guide, ensuring all projections meet institutional acquisition standards.

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Frequently Asked Questions

How does leverage affect real estate ROI?

Leverage amplifies your return on equity. If you buy a $400,000 property with 20% down ($80,000 equity) and the property appreciates 4% in year one ($16,000 gain), your return on equity is $16,000 ÷ $80,000 = 20% — 5 times higher than the asset's unleveraged appreciation rate.

Why does Haven divide returns by initial equity rather than purchase price?

Dividing returns by purchase price is a common rookie mistake that severely understates investor returns. In real estate, the denominator of ROI must be the actual cash invested (down payment + closing costs), as that is the opportunity cost of your capital.

What is a good 5-year real estate ROI?

Over a 5-year holding period with 20% down, typical US rental properties produce an 80% to 150% total return on invested equity (combining 4% annual appreciation and standard 6%–8% cash flow yields), translating to a 12% to 20% annualized IRR.

Does this calculation include mortgage principal reduction?

Mortgage amortization further increases your equity each year. In this model, conservative projections focus primarily on market appreciation plus distributed cash flows, meaning principal paydown provides additional upside.

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