Calculator
Real Estate Investment Return Calculator
Gross yield and net monthly cash flow on an investment property, after financing.
Real estate investors check two main measures - the gross yield from rent, and the monthly cash flow left in their pocket after paying the mortgage. The calculator computes both together, to give a realistic picture of the property's economic viability.
Gross yield
4.5%
Net return on equity
0.7%
Net monthly cash flow after mortgage
₪364
Property value in 10 years
₪1,612,700
Total ROI (10 years)
76%
This is a general estimate only. It does not include income tax, appreciation or future changes in rent, and does not constitute investment advice.
How the calculator works
You enter the property price, the equity invested, the expected monthly rent, the monthly expenses, the mortgage rate and term, and the expected annual appreciation percentage. The calculator shows the net monthly cash flow, the gross yield, the cash-on-cash return, and the total 10-year ROI - which combines both rental profit and estimated appreciation.
The formula behind the calculation
Gross yield = (annual rent ÷ property price) × 100. Cash-on-cash return = (annual net cash flow ÷ equity) × 100. Total 10-year ROI = (accumulated rental profit + appreciation) ÷ equity × 100, where the appreciation is calculated as compound growth on the property price.
What the calculator does not include
Appreciation is an assumption entered manually - not a real forecast, and the market can move differently
It does not include tax on rental income or capital gains tax on sale
It assumes full occupancy all year - it does not account for vacancy periods longer than estimated
Why it matters
A property with a high gross yield can still produce negative cash flow if the financing on it is too expensive, and vice versa. A proper check of an investment combines both measures, and does not look at the gross yield alone as is usually seen in real estate listings.
Frequently asked questions
What is cash-on-cash and why is it more important than gross yield?
Gross yield ignores financing and tax. Cash-on-cash shows how much actual cash return you receive on the equity you invested, after expenses and the mortgage - and therefore better reflects the real viability.
Is it worth leveraging (taking a mortgage) on an investment property?
It depends on the investment goal. Leverage increases the return on equity if the cost of financing is lower than the return on the property, but it also increases the risk and the required monthly payment.
What is a "good" gross yield for an investment property in Israel?
It varies greatly by region and property type, and there is no single nationwide figure that is right to quote. Instead of comparing to a general number, it is better to compare several specific properties you are examining in the same period and the same area.
Is the return on equity always higher with higher leverage?
Not necessarily - it depends on the gap between the mortgage interest rate and the return from the property. If the cost of financing is higher than the return, higher leverage will actually hurt the cash flow and the return on equity.
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