Annualized Return (5-Year)

Compound annual growth rate over a 5-year hold period.

Example Result

Sample Data

-0.98%

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

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Annualized Return (5-Year) Formula

(

)

− 1

where V = Total Value at Year 5, C = Cash Invested

($385,000 / $111,163)^(1/5) - 1

-0.98%

What This Means

A sample property priced at $385,000 with $2,850/month rent has a annualized return (5-year) of -0.98%. This metric lets you directly compare real estate returns against stocks, bonds, or other investments that report annualized returns. A 15% annualized return from rental property is directly comparable to a 10% S&P 500 return.

Where This Value Comes From

Annualized Return (5-Year) is not entered directly — it is calculated from Total Cash Invested. See the formula breakdown above and the detailed inputs below.

Calculated From

Annualized Return (5-Year) is calculated using these inputs:

Total Cash Invested

Total cash committed to the property: closing costs, rent-ready, reserves, and negative cash flow.

$111,163

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Why It Matters

This metric lets you directly compare real estate returns against stocks, bonds, or other investments that report annualized returns. A 15% annualized return from rental property is directly comparable to a 10% S&P 500 return.

Detailed Explanation

The Annualized Return calculates the compound annual growth rate (CAGR) of your total investment over 5 years, including cumulative cash flows and net sale proceeds. It expresses the total return as an equivalent annual percentage.