See your total return — not just cash flow
Calculate total return on investment including cash flow, appreciation, and principal paydown. Most investors only look at cash flow — ROI shows you the complete picture.
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Total ROI
68.63%
Over 5 years
Annualized ROI
11.02%
Moderate — may justify the risk for the right investor
Return Breakdown
Free — includes projections, scenarios & lender reports
These are different metrics that answer different questions. Using the wrong one gives you an incomplete picture of your investment.
The complete picture
Includes all profit sources: cumulative cash flow, property appreciation, and mortgage principal paydown — minus selling costs. Shows what you actually walk away with.
Example: $82,500 invested, 5yr hold
Total ROI ≈ 72% (11.5% annualized)
Annual cash flow only
Only measures annual cash flow relative to cash invested. Ignores appreciation, principal paydown, and equity buildup entirely. More conservative — only counts money hitting your account.
Same deal: $82,500 invested, $4,800/yr cash flow
CoC Return ≈ 5.8% (just cash flow)
A deal with a mediocre 5% cash-on-cash return can still deliver a strong 12%+ annualized ROI when appreciation and loan paydown are factored in. Both metrics matter — CoC tells you if you can cover costs today, ROI tells you if the investment is worth making.
Real estate ROI captures the total return on your investment — not just cash flow. It answers the question: "After I sell, how much did I actually make on every dollar I invested?"
(Total Profit ÷ Cash Invested) × 100
Total profit = cumulative cash flow + sale proceeds − original cash invested.
((1 + ROI) ^ (1/years) − 1) × 100
Converts multi-year return to an equivalent annual rate for comparison.
Purchase Price: $300,000
Down Payment (25%): $75,000
Closing Costs: $7,500
Total Cash Invested: $82,500
Hold Period: 5 years
Annual Cash Flow: $4,800
Cumulative Cash Flow: $24,000
Future Value (3%/yr): $347,782
Selling Costs (6%): −$20,867
Remaining Loan: −$207,795
Sale Proceeds: $119,120
Total ROI: ($24,000 + $119,120 − $82,500) ÷ $82,500 = 73.5%
Annualized: 11.7%
The cash-on-cash return on this deal is only 5.8% — but total ROI is 73.5% over 5 years. The difference? $47,782 in appreciation and $17,205 in principal paydown.
| Annualized ROI | Assessment | Typical Strategy |
|---|---|---|
| 15%+ | Excellent | Value-add, BRRRR, short-term flips |
| 10–15% | Strong | Buy-and-hold with appreciation + cash flow |
| 6–10% | Moderate | Primary markets, appreciation-heavy plays |
| < 6% | Weak | Rarely justifies the illiquidity and risk |
ROI is a snapshot metric. For deals with varying cash flows over time (BRRRR, value-add, development), IRR gives a more accurate measure because it accounts for when money comes in. DealForge calculates both automatically.
ROI (Return on Investment) measures the total profit from a real estate investment as a percentage of what you put in. Unlike cash-on-cash return, ROI includes all profit sources: cumulative cash flow, property appreciation, and mortgage principal paydown — giving you the complete picture of investment performance.
A good total ROI depends on your hold period and strategy. For leveraged buy-and-hold over 5 years, 50–100% total ROI (10–15% annualized) is strong. Flips target 20–30% in under a year. Below 6–8% annualized rarely justifies the risk and illiquidity compared to passive alternatives like index funds.
Cash-on-cash return only measures annual cash flow relative to cash invested — it ignores appreciation, principal paydown, and equity buildup. ROI captures everything: cash flow + appreciation + principal paydown − selling costs. CoC is a snapshot; ROI is the full picture over the hold period.
Yes. Total ROI factors in the projected increase in property value over the hold period, minus selling costs (typically 5–8%). This is one of the biggest differences between ROI and cash-on-cash return, which ignores appreciation entirely.
Annualized ROI converts total return over a multi-year hold into an equivalent annual rate, so you can compare investments with different hold periods. Formula: ((1 + Total ROI) ^ (1 / Years) − 1). A 60% total ROI over 5 years is about 9.9% annualized.
Use both. ROI is simpler and tells you total return on capital. IRR (Internal Rate of Return) accounts for the timing of cash flows — money received earlier is worth more. For straightforward buy-and-hold deals, ROI is usually sufficient. For deals with uneven cash flows (BRRRR, development, value-add), IRR gives a more accurate picture.
Explore other metrics with these focused investment tools.
ROI is one metric. DealForge gives you the full picture: cash flow projections, cap rate, DSCR, IRR, scenario modeling, and lender-ready reports — all in one platform.
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