Investment ROI calculator
Full hold period cash flow, equity build and exit after tax.
The deal
Rs
Rs 2.5 crore
Rsa month
Finance
Growth and exit
Total return over 7 years69.6%
Rs 6,266,130 of profit on Rs 9,000,000 invested, which is 7.84% a year compounded.
- Annualised7.84%
- IRR5.56%
- Equity multiple1.70x
- Capital gain after taxRs 1.78 crore
- Loan paid downRs 18.55 lakh
- Cash inRs 9,000,000Deposit plus Rs 1,500,000 of buying costs
- Year one cash on cash-19.57%-Rs 1,761,658
- Net proceeds at exitRs 26,129,043Sale at Rs 4.28 crore
- Cash flow paybackNot within the holdWhen rent alone returns your capital
Cumulative position
- Cumulative cash flow
- Equity in the property
- Property value
Cash versus leverage
Borrowing lifts the return on your own money while the property grows faster than the interest rate, and cuts it just as sharply when it does not.
What you get at exit
Sale priceRs 42,845,607
Selling costs-Rs 1,071,140
Capital gains tax0.0%-Rs 0
Loan to redeem-Rs 15,645,424
Net proceedsRs 26,129,043
Year by year
| Year | Rent collected | Costs and tax | Mortgage | Cash flow | Equity |
|---|---|---|---|---|---|
| Year 1 | Rs 1,214,400 | Rs 326,448 | Rs 2,649,610 | -Rs 1,761,658 | Rs 9,666,453 |
| Year 2 | Rs 1,299,408 | Rs 349,299 | Rs 2,649,610 | -Rs 1,699,501 | Rs 12,018,238 |
| Year 3 | Rs 1,390,367 | Rs 373,750 | Rs 2,649,610 | -Rs 1,632,994 | Rs 14,572,010 |
| Year 4 | Rs 1,487,692 | Rs 399,913 | Rs 2,649,610 | -Rs 1,561,830 | Rs 17,346,035 |
| Year 5 | Rs 1,591,831 | Rs 427,907 | Rs 2,649,610 | -Rs 1,485,686 | Rs 20,360,360 |
| Year 6 | Rs 1,703,259 | Rs 457,860 | Rs 2,649,610 | -Rs 1,404,211 | Rs 23,637,007 |
| Year 7 | Rs 1,822,487 | Rs 489,910 | Rs 2,649,610 | -Rs 1,317,033 | Rs 27,200,183 |
Rent does not cover the costs
You need Rs 302,254 a month to break even on running costs and the mortgage. At Rs 110,000 you are funding the gap from your own pocket while you wait for capital growth.
What is not in here
No allowance for a major refurbishment, a change in tax rules, or a period with no tenant beyond the vacancy rate you set. Model the deal at a lower growth rate before you commit.
Return69.6%7.84% a year
About this calculator
Model a rental hold year by year, compare buying in cash against using leverage, and see the annualised return once selling costs and capital gains tax are paid. Capital gains tax follows the holding period table for plots, houses and flats. Capital gains tax applies the annual exemption and the residential property rates.
Capital gains rules change often. Confirm the rate that applies to your holding period before you sell.