1. What is a Rental Property Percentage Calculator?

Definition: This calculator determines the return percentage (ROI) for a rental property based on net income and property value.

Purpose: It helps real estate investors evaluate the profitability of rental properties by calculating the annual return percentage.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( R \) — Return percentage (%)
• \( I \) — Net income (USD)
• \( V \) — Property value (USD)

Explanation: The net income is divided by the property value to get the return ratio, then multiplied by 100 to convert to percentage.

3. Importance of Return Percentage Calculation

Details: Calculating return percentage helps investors compare different properties, assess investment performance, and make informed purchasing decisions.

4. Using the Calculator

Tips: Enter the annual net income (rental income minus expenses) and current property value. Both values must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: What is considered a good return percentage?
A: Typically, 8-12% is considered good, but this varies by market and investment goals.

Q2: Should I use purchase price or current value?
A: For ROI calculation, use purchase price. For current performance, use current market value.

Q3: What expenses should be included in net income?
A: Include all operating expenses (taxes, insurance, maintenance) but not mortgage payments.

Q4: How does this differ from cap rate?
A: This is essentially the cap rate expressed as a percentage. Cap rate = (Net Operating Income / Property Value) × 100.

Q5: Should I include vacancy rates?
A: Yes, for accurate calculations, reduce annual income by expected vacancy percentage.