ROI Calculator

How to Use This Calculator

The ROI calculator combines purchase price, closing costs, and financing structure into a meaningful return metric. Follow these steps:

1. Step 1: Enter the purchase price of the property.
2. Step 2: Enter the total closing costs (Grunderwerbsteuer, notary, land registry, and optionally broker fees). Use our closing costs calculator for an accurate estimate.
3. Step 3: Enter the equity (down payment) you are investing, meaning the part of the purchase price you do not finance.
4. Step 4: Enter the expected annual net income, meaning rental income minus all expenses and mortgage payments.

Understanding the Results

The ROI calculation reveals how efficiently your capital is being deployed:

• Total Cash Invested: The sum of your down payment and closing costs, representing the actual out-of-pocket capital required for the purchase.
• Cash-on-Cash Return: Annual net income divided by total cash invested (down payment plus closing costs), expressed as a percentage.
• Total Property Cost: The purchase price plus closing costs.
• Loan Amount: The purchase price minus your down payment. The bank finances this part; in this calculation you pay the closing costs from your own funds.

Why This Matters for Investors

ROI shows how strongly leverage works. If the property's return is above the loan interest rate, financing raises the return on the capital you invest. A worked example: a 300,000-euro purchase price, 35,000 euros of closing costs, a 60,000-euro down payment, and 4,000 euros of annual net income give total cash invested of 95,000 euros, a cash-on-cash return of 4.21%, a total cost of 335,000 euros, and a loan of 240,000 euros. Leverage also works in reverse: if rental income fails to cover costs, financing amplifies the loss. Model several scenarios and check that the investment still holds up with higher vacancy or increased interest rates.