Add your cumulative net rental income (gross rent minus expenses like maintenance, taxes, and insurance) to the property's current value. This combined figure as your final value captures both income and appreciation returns.

Many real estate investors target a total annual return of 8-12%, combining rental yield and appreciation. Cash-on-cash returns of 8-10% are often considered strong, though this varies by market and property class.

If you financed the property, use your actual cash outlay (down payment plus closing costs) as the initial investment rather than the full purchase price. This gives you the leveraged ROI, which reflects your true return on the cash you invested.