How to Calculate House Flipping ROI
What is House Flipping ROI?
House flipping calculates profit on real estate investment by accounting for purchase price, renovation costs, holding costs, and selling expenses. Annualized ROI shows return rate.
Formula
Profit = Sale price - (Purchase + Rehab + Holding + Closing costs)
Step-by-Step Guide
- 1Enter purchase price, rehab cost, hold time, sale price
- 2Calculate monthly holding costs (taxes, insurance, utilities)
- 3Subtract all costs from sale price to find profit
Worked Examples
Input
Buy: $200k, Rehab: $50k, Hold: 6mo, Sell: $320k
Result
Profit ≈ $40k
After ~$30k holding and closing costs
Common Mistakes to Avoid
- ✕Underestimating holding costs
- ✕Forgetting closing costs on both sides
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