How to use this calculator
- Enter or choose purchase price.
- Enter or choose buying costs.
- Enter or choose renovation cost.
- Enter or choose holding costs (per month).
- Enter or choose months from purchase to sale.
- The profit before tax updates as you type. Use Copy result or Share to keep it.
Method
Total cost = Purchase + Buying costs + Renovation + Holding × Months + Loan × Rate × Months ÷ 12 + Loan × Fees% + Sale × Selling%; Profit = Sale − Total cost; Cash invested = Total cost − Selling costs − Loan; Annualised = Cash ROI × 12 ÷ Months
- Sale
- expected sale price after the works (after-repair value)
- Loan
- interest-only short-term finance repaid from the sale
Worked example
- Holding = 1,500 × 6 = $9,000; interest = 150,000 × 10% × 6/12 = $7,500; loan fees = 2% × 150,000 = $3,000.
- Selling costs = 8% × 320,000 = $25,600.
- Total cost = 200,000 + 5,000 + 40,000 + 9,000 + 7,500 + 3,000 + 25,600 = $290,100; profit = 320,000 − 290,100 = $29,900.
- Cash invested = 290,100 − 25,600 − 150,000 = $114,500; 29,900 ÷ 114,500 = 26.11% in 6 months.
The flip makes $29,900 before tax: 10.31% on total cost and 26.11% on the $114,500 of cash put in.
What the result means
Check the margin against the risk. A thin profit can vanish with one month’s delay or a renovation overrun, so rerun the numbers with a lower sale price and a longer timeline before you commit.
Assumptions and limits
- The loan is interest-only and repaid from the sale proceeds.
- Selling costs are paid out of the sale, so they are not part of the cash you invest.
- Profit is before income or capital gains tax.
- The annualised figure is a simple pro-rata, not a compound or IRR measure.
- Draw schedules on renovation loans (interest only on drawn funds) are not modelled.
Questions
What is the 70% rule?
A rule of thumb some investors use: pay no more than 70% of the after-repair value minus the renovation cost. It is a quick filter, not a substitute for a full cost estimate like this one.
Why is cash ROI higher than ROI on cost?
Borrowing means you put in less of your own money, so the same profit is a bigger return on your cash. It also magnifies losses.
Please note: Returns are illustrations at a constant rate, not predictions or guarantees. Investments can lose value. This is not investment advice.