Investment Return
Real Estate ROI Calculator
Estimate annual return on the cash invested in a property using your own income, costs and financing inputs.
Your estimate.
Enter the purchase price, cash invested and annual rental income to estimate ROI.
Inputs
What you control.
- Purchase price provides context but is not used as the ROI denominator.
- Cash invested means the base equity contribution; acquisition, renovation and other upfront costs are added separately.
- Income, vacancy, operating expenses and financing costs are annual user-entered figures.
- Cash invested may exceed purchase price; the calculator does not infer financing structure.
Results
What this calculates.
- Annual ROI measures one-year net return against total cash invested.
- Supporting results keep income, operating costs, financing costs and upfront capital visible.
- Rental yield is deliberately not reproduced here.
Formula and methodology
How the estimate is produced.
Annual gross income = annual rental income + other annual income.
Vacancy cost = annual rental income × vacancy allowance ÷ 100.
Annual operating costs = service charges + maintenance + management + insurance + property-specific recurring fees + other annual operating costs + vacancy cost.
Annual financing costs = annual financing interest + annual financing fees.
Annual net return = annual gross income − annual operating costs − annual financing costs.
Total cash invested = cash invested + acquisition costs + renovation / fit-out costs + other upfront costs.
Annual ROI = annual net return ÷ total cash invested × 100.
Financing interest and fees are entered directly. This version does not calculate mortgage amortisation or treat principal repayment as an expense.
Assumptions
Rules and values used.
- System assumptions: None required for the core ROI formula.
- Purchase price, cash invested, income, upfront costs, vacancy, operating costs and financing costs are all user-controlled.
- No UAE market average, appreciation rate, mortgage rate or cost percentage is inserted automatically.
Important limitations
How to use the result.
- This is a one-year estimate, not a multi-year investment model.
- It does not estimate capital appreciation, resale gain or loss, IRR, NPV, mortgage principal reduction, tax consequences or future rent growth.
- Mortgage principal is not treated as an annual expense; principal repayment increases equity and is outside this V1 calculation.
- A negative annual return and ROI are retained when costs exceed income.
Results are estimates based only on the values entered. Actual rental income, vacancy, operating costs, financing costs, transaction costs and investment performance can differ. This calculator does not provide investment, financial, tax or legal advice.
Example calculation
The method in context.
Illustrative example
A property purchased for AED 1,000,000 with AED 300,000 base equity, AED 50,000 in additional upfront costs, AED 80,000 annual rent and the annual costs shown in the methodology produces:
- Vacancy cost
- AED 4,000
- Annual operating costs
- AED 24,000
- Annual financing costs
- AED 20,000
- Annual gross income
- AED 80,000
- Annual net return
- AED 36,000
- Total cash invested
- AED 350,000
- Annual ROI
- 10.29%
Commercial context