Property ROI Calculator
Calculate total return, CAGR, and cash-on-cash return for a property investment with rental income, appreciation, and an optional exit-price override.
How this works
We compute three return metrics in parallel — total absolute return, the price's compounded annual growth rate (CAGR), and the cash-on-cash rent yield on the purchase price.
defaultExitPrice = purchasePrice × (1 + appreciationPct/100)^holdYears
cumulativeNetCash = (annualRent − annualExpenses) × holdYears
appreciationGain = exitPrice − purchasePrice
totalReturn = cumulativeNetCash + appreciationGain
cagrPct = ((exitPrice / purchasePrice)^(1/holdYears) − 1) × 100
cashOnCashPct = annualRent / purchasePrice × 100The CAGR and exit price satisfy the compounding identity (1 + cagrPct/100)^holdYears = exitPrice / purchasePrice exactly (within numerical precision), so the two views of price growth are always consistent.
Worked example
Apartment bought for NPR 1,50,00,000, held for 10 years with annual appreciation of 7%, rented at NPR 9,00,000 / year, with NPR 1,20,000 / year in expenses, and no exit-price override:
- Default exit price =
1,50,00,000 × 1.07^10≈ NPR 2,95,07,000 - Cumulative net cash =
(9,00,000 − 1,20,000) × 10= NPR 78,00,000 - Appreciation gain ≈ NPR 1,45,07,000
- Total return ≈ NPR 2,23,07,000
- CAGR = 7.00%, Cash-on-cash = 6.00%
Toggle the override on and try a 5% haircut to the auto-derived exit price to stress-test the investment.
Sources
- Compounded annual growth rate (CAGR) — standard finance derivation
FAQ
What does this ROI calculator measure?
Three different return metrics, side by side. Total return is the absolute money you walk away with: cumulative net rent over the holding period plus appreciation gain on exit. CAGR is the annualised compounded growth rate of just the property price (exit price ÷ purchase price, raised to 1/years, minus 1). Cash-on-cash is the annual rent yield on the purchase price — useful for comparing real estate to fixed-deposit or bond returns.
How is CAGR computed and why does it use only the price, not the rent?
CAGR is computed as (exitPrice / purchasePrice)^(1/holdYears) − 1, expressed as a percentage. It captures the compounded annual price appreciation independent of rental income. Including rent in the same number would conflate two different return streams; we keep them separate so you can see how much of your return is rent (cash flow) versus appreciation (capital gain).
Why is the default exit price set to (1 + appreciation%)^years × purchase?
It's a clean baseline: assume the property appreciates at exactly the rate you typed, year after year. You can override the exit price with any figure — a recent comparable sale, a broker's quote, or a conservative haircut — and the CAGR / total return numbers update accordingly. The compounding identity (1 + cagr/100)^years ≈ exitPrice / purchasePrice always holds within numerical precision.
What appreciation rate should I assume for property in Nepal or India?
Long-term residential price appreciation in Kathmandu, Pokhara, and tier-1 Indian cities has averaged 5% to 8% per year in nominal terms over the past decade, slightly above inflation. Short-term price moves can be much sharper in either direction, especially around regulatory changes or interest-rate shifts. We recommend stress-testing the calculation at 3% and 10% to bracket the realistic range.
Should I subtract loan EMI, taxes, and brokerage from total return?
This calculator returns the asset-level return — the money the property itself generates. To get the investor-level return, subtract loan interest paid, capital gains tax, brokerage on entry and exit (typically 1% to 2% each side), stamp duty on entry, and any one-time renovation costs. Use the Mortgage / EMI, Stamp Duty, and Capital Gains calculators to layer those costs on top.
Is the cash-on-cash figure the same as rental yield?
In this calculator, yes — we compute it as annualRent / purchasePrice × 100, which matches the gross rental yield from the Rental Yield calculator. In leveraged real estate analysis the term sometimes refers to (cash flow / equity invested), where equity invested is the down payment rather than the full price. Stick to one definition consistently when comparing properties.