Key Takeaway
Real estate ROI includes rental income, capital appreciation, loan leverage, and tax benefits. A property bought with 25% downpayment appreciating at 6% annually delivers 22–25% annualized ROI on invested capital due to leverage.
Real Estate ROI Calculator
Estimate the comprehensive returns on a real estate purchase over a specific holding period.
Return Estimates
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Frequently Asked Questions
How is ROI different from Rental Yield?
Rental yield only measures the annual income generated from the property. Return on Investment (ROI) is a comprehensive metric that includes both rental income and capital appreciation, minus all costs (loan interest, taxes, maintenance).
What is a good ROI for real estate in India?
A healthy overall ROI for residential real estate in India is around 8-10% annually (including capital appreciation). If leveraged effectively with a home loan, cash-on-cash return can be higher.
Are home loan interest payments factored into ROI?
Yes, for a true ROI calculation, you must deduct the cost of financing (interest paid on the home loan) and add back any tax savings achieved through home loan deductions (Section 24b and 80C).
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