Tools

Real Estate ROI Calculator

Calculate the return on investment for a real estate property.

months

How to Calculate

Real estate ROI is calculated by considering all costs from purchase to sale. Total expenses = Acquisition costs + Sale costs + Holding costs Total investment = Purchase price + Total expenses Net profit = Sale price − Total investment Total ROI = (Net profit ÷ Total investment) × 100 Annualized ROI = Total ROI ÷ Holding period (years) Acquisition costs include acquisition tax, brokerage fees, legal fees, etc. Sale costs include capital gains tax, brokerage fees, etc. Holding costs include property tax, comprehensive real estate tax, management fees, loan interest, etc.

Example

Example: Purchase ₩500M, Sale ₩600M, Acquisition costs ₩20M, Sale costs ₩15M, Holding costs ₩5M, Holding period 24 months Total expenses = ₩20M + ₩15M + ₩5M = ₩40,000,000 Total investment = ₩500M + ₩40M = ₩540,000,000 Net profit = ₩600M − ₩540M = ₩60,000,000 Total ROI = ₩60M ÷ ₩540M × 100 = 11.11% Annualized ROI = 11.11% ÷ 2 years = 5.56%

FAQ

What is included in acquisition costs?
Acquisition tax (1–12% of purchase price), real estate brokerage fee (0.3–0.9%), legal fees (approx. ₩300,000–500,000), stamp duty, etc. The acquisition tax rate varies significantly depending on the number of properties owned and the price.
How is capital gains tax calculated?
Capital gains tax is applied to the taxable base (capital gain minus basic deduction). The rate varies depending on holding period, number of properties, and whether the area is a regulated zone, so a separate calculation is needed.
Why is annualized ROI important?
Annualized ROI is used to compare investments with different holding periods. For example, 20% over 2 years vs. 40% over 5 years: annualized ROI is 10% vs. 8%, showing that the shorter investment was more efficient.