Property Investment Calculator
Borrowing to buy a rental property magnifies both gains and losses. This calculator shows the return on the cash you actually invest, after the loan, the rent and the eventual sale.
Results
Return on your equity (IRR)
7.71%
- Total profit
- ₹31,89,172
- Cash back per rupee invested
- 2.66 ×
- Cash you put in
- ₹19,20,000
- Sale price
- ₹1,07,45,086
- Loan repaid at sale
- ₹31,49,722
- Monthly EMI
- ₹39,052
Putting in ₹19,20,000 of your own money and selling after 10 years for ₹1,07,45,086 gives a profit of ₹31,89,172 and an annual return on your equity (IRR) of 7.71%.
Cash flows to you (10 rows)
| Year | Rent after costs and EMI | Sale proceeds after loan | Total cash |
|---|---|---|---|
| Year 1 | -₹2,76,625 | ₹0 | -₹2,76,625 |
| Year 2 | -₹2,67,025 | ₹0 | -₹2,67,025 |
| Year 3 | -₹2,56,945 | ₹0 | -₹2,56,945 |
| Year 4 | -₹2,46,361 | ₹0 | -₹2,46,361 |
| Year 5 | -₹2,35,247 | ₹0 | -₹2,35,247 |
| Year 6 | -₹2,23,578 | ₹0 | -₹2,23,578 |
| Year 7 | -₹2,11,326 | ₹0 | -₹2,11,326 |
| Year 8 | -₹1,98,461 | ₹0 | -₹1,98,461 |
| Year 9 | -₹1,84,953 | ₹0 | -₹1,84,953 |
| Year 10 | -₹1,70,770 | ₹73,80,462 | ₹72,09,693 |
Show the calculation steps
- Your equity = down payment ₹15,00,000 + buying costs ₹4,20,000 = ₹19,20,000; loan ₹45,00,000, EMI ₹39,052.
- Each year: net cash = rent − expenses (20% of rent) − EMIs. Rent starts at ₹2,40,000 and rises 5% a year.
- In year 10 you sell for ₹1,07,45,086 (property grows 6% a year), pay 2% selling costs and repay the loan balance of ₹31,49,722.
- IRR of the cash flows on your equity = 7.71%; total cash back ₹51,09,172 on ₹19,20,000 invested.
- Leverage magnifies gains and losses. This ignores tax, changes in interest rates and vacant periods, and assumes constant growth.
Leverage
A loan lets a small down payment control a large property, so a modest price rise becomes a big return on your equity. The same leverage magnifies a fall in price or a period without rent.
What the IRR captures
The IRR treats your down payment and costs as the money out, the yearly rent after costs and EMI as ongoing flows, and the sale proceeds after repaying the loan as the money back. It is a single yearly rate for the whole investment.
Formula
Yearly cash = rent − operating expenses − EMIs
Sale cash = Sale price × (1 − selling costs) − loan balance
IRR: the rate at which the yearly cash flows on your equity have a net present value of zero
Where:
- Equity
- = Down payment plus buying costs, the cash you put in
Example calculation
₹60 lakh flat with 25% down, held 10 years
Inputs
- Property Price
- ₹60,00,000
- Down Payment
- 25 %
- Buying Costs
- 7 % of price
- Loan Interest Rate
- 8.5 %
- Loan Tenure
- 20 years
- Years You Hold It
- 10 years
- Price Growth
- 6 % a year
- Monthly Rent
- ₹20,000
- Rent Increase
- 5 % a year
- Operating Expenses
- 20 % of rent
- Selling Costs
- 2 % of sale price
Result
- Return on your equity (IRR)
- 7.71%
- Total profit
- ₹31,89,172
- Cash back per rupee invested
- 2.66 ×
- Cash you put in
- ₹19,20,000
- Sale price
- ₹1,07,45,086
- Loan repaid at sale
- ₹31,49,722
- Monthly EMI
- ₹39,052
Step-by-step
- Your equity = down payment ₹15,00,000 + buying costs ₹4,20,000 = ₹19,20,000; loan ₹45,00,000, EMI ₹39,052.
- Each year: net cash = rent − expenses (20% of rent) − EMIs. Rent starts at ₹2,40,000 and rises 5% a year.
- In year 10 you sell for ₹1,07,45,086 (property grows 6% a year), pay 2% selling costs and repay the loan balance of ₹31,49,722.
- IRR of the cash flows on your equity = 7.71%; total cash back ₹51,09,172 on ₹19,20,000 invested.
Important notes
- Ignores income tax, capital gains tax and interest-rate changes. Rent must be enough to cover EMIs or you will need to add cash each month (shown as a negative yearly flow).
Disclaimer: This calculator provides estimates for informational purposes and should not be considered financial advice. Actual figures from lenders, banks and investment products can differ because of fees, taxes, rounding rules and changing rates. Consult a qualified professional before making financial decisions.
Frequently asked questions
What is a good return on a rental property?
Compare the IRR with what you could earn on lower-risk investments, given the extra effort and risk.
Does the IRR include the loan?
Yes. It measures the return on your own cash after borrowing.
What if the rent does not cover the EMI?
The shortfall shows as negative cash in that year, and lowers the IRR.
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- Property ROI CalculatorCalculate the total profit, ROI and annualised return of a property from purchase costs, rent and sale price.
- IRR CalculatorCalculate the internal rate of return (IRR) for a series of evenly spaced cash flows, per period and annualised.
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