Finance

Home Return on Investment Calculator (5 Years)

Calculate return on investment as a percentage. This home version uses a 5-year planning term as its starting point.

For this 5-year home investment, the Return percentage is the total gain or loss on the amount invested, expressed as a share of that amount, so a positive Return means the final value is higher than the amount invested, while a negative Return means it is lower.

Formula

Return equals final value minus invested amount, divided by invested amount, times 100.

How it works

A positive return means the final value is higher than the amount invested.

Worked example

Amount invested $10,000, final value $15,000, term 5 years. Using the page formula, return equals $15,000 minus $10,000, divided by $10,000, times 100, which is $5,000 divided by $10,000, times 100, which is 50.00%. That is the calculator's own result for these defaults, and it is the same on every page in this group because the term is not an input.

Spread over 5 years as an illustration only, not as an output of this page, the simple average is 50 divided by 5, which is 10.00% a year, and the steady rate that would compound $10,000 to $15,000 over 5 years is 8.45% a year. The steady rate is lower because compounding builds on earlier gains, while the simple average ignores that effect. Neither illustration is the page output, and neither includes fees, taxes, mortgage interest or inflation.

Who this term suits for a home household: a home household checking a fast, short home gain, for example a home bought, renovated and sold within about 5 years, where a 50% total return in a short time is a strong result worth checking against renovation costs, fees and taxes.

FAQs

What is a good ROI?
There is no single good figure. Compare returns over the same period and with the same risk before deciding.

Is this home calculator exact?
No, it is an estimate for planning only, based on the numbers you enter.

Are these figures financial advice?
No, they are estimates for planning only, not financial advice. Check with a qualified adviser for decisions involving large sums.

Is 50% a good return on a home over only 5 years?
It is a strong total for 5 years, but judge it after renovation costs, buying and selling fees, taxes and mortgage interest, not on the sale price alone.

What if the home cost more to renovate than the gain?
Then the true return is lower than 50%. Add every renovation, repair and fee to the amount invested before you judge the result.

Should a 5-year home return decide a quick sale?
Not alone. A quick gain can reverse just as fast, so check local prices, selling costs and where you will live next before deciding.

Estimates only, not financial advice. Figures are approximate and do not include all fees, taxes, or changing rates unless stated.