🏡💰 Rental Property ROI Calculator 📈✨
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📝 7 Mistakes & How to Fix Them
1. Ignoring vacancy costs
Many investors assume 100% occupancy. Factor in 5–10% vacancy to cover turnover, marketing, and lost rent. A property that sits empty for 2 months can erase your annual profit.
2. Underestimating maintenance
Set aside 10–15% of monthly rent for repairs. A new roof or HVAC can cost $5,000–$10,000. Without reserves, you'll be in the red.
3. Forgetting property taxes & insurance
They increase annually. Use current rates and add 3–5% yearly growth. Many investors use last year's numbers and get surprised.
4. Miscalculating mortgage payment
Include P&I, but also PMI if down payment < 20%. This can add $100–$300/month and drastically change cash flow.
5. Ignoring capex reserves
Capital expenditures (roof, AC, appliances) are not monthly expenses. Set aside 5–10% of rent for long-term replacements.
6. Overlooking property management fees
If you self-manage, value your time. Professional management (8–12%) reduces net income but saves headaches. Compare both scenarios.
7. Not accounting for appreciation
ROI is usually cash-on-cash. Include appreciation for total return, but don't rely on it for monthly cash flow. Use conservative estimates.
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