Calculating ROI for Property Flips
Property flipping requires different math than rentals. Calculate true returns including holding costs, renovation expenses, and time value of money for fix-and-flip investments.
How the Calculating ROI for Property Flips works
Enter acquisition price, renovation budget, timeline, ARV, and all carrying costs. Get total ROI, annualized returns, break-even price, and maximum renovation spend to maintain target returns.
Flippers often ignore time and holding costs, turning profits into losses. This calculator includes everything: interest, utilities, taxes, and opportunity cost. Know your real returns before starting demolition.
How it works
Tutorial
Property flipping ROI differs fundamentally from rental calculations because time matters enormously. A 20% return in 6 months beats a 20% return in 2 years, but many flippers forget to include holding costs, financing expenses, and opportunity costs that erode profits.
You have two options: use the calculator above to analyze your flip with all costs included, or follow this manual guide to understand how true flip ROI accounts for time and hidden expenses.
The Formula
| Component | Formula |
|---|---|
| Total Investment | Purchase + Renovation + Holding Costs + Financing |
| Net Profit | Sale Price – Total Investment – Selling Costs |
| ROI Percentage | (Net Profit ÷ Total Investment) × 100 |
Step-by-Step Calculation
Here’s a complete flip analysis with all costs included.
Step 1: Calculate Total Investment
Include every dollar spent during the project:
| Expense | Amount |
|---|---|
| Purchase Price | $150,000 |
| Renovation Costs | $35,000 |
| Holding Costs (6 months) | $6,000 |
| Financing Costs | $4,000 |
| Total Investment | $195,000 |
Calculation: $150,000 + $35,000 + $6,000 + $4,000 = $195,000
Step 2: Calculate Net Profit
Subtract all costs from your sale price:
| Item | Amount |
|---|---|
| Sale Price | $240,000 |
| Selling Costs (6%) | -$14,400 |
| Total Investment | -$195,000 |
| Net Profit | $30,600 |
Calculation: $240,000 – $14,400 – $195,000 = $30,600
Step 3: Calculate ROI Percentage
Divide profit by investment and convert to percentage:
| Step | Calculation | Result |
|---|---|---|
| Divide profit by investment | $30,600 ÷ $195,000 | 0.1569 |
| Convert to percentage | 0.1569 × 100 | 15.69% |
Final Answer: Your property flip ROI is 15.69%
What This Means
A 15.69% return in 6 months is excellent, equivalent to an annualized return over 30%. However, this assumes everything goes perfectly—budget overruns, market shifts, or longer holding periods can quickly turn profits into losses.
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