Total Return Rental Properties — All US Markets
Total Return measures Net Income plus long-term price appreciation on the cash actually invested — useful when financing with a mortgage, since it captures both the annual cash flow and the equity gained as the property appreciates.
Formula:
- Cash Invested = Down Payment + Closing Costs
- Net Income = (Est. Rent × 12 − Tax − Insurance − Maintenance − Vacancy − Mgmt) − Annual Mortgage
- Total Return = Net Income + Annual Price Growth
- ROI Cash-on-Cash = Total Return ÷ Cash Invested