Holding Period Return Calculator
Total return · Annualized HPR · Cash flow + appreciation
Net after all expenses
Agent + closing: avg 7–9%
Principal paid during hold
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Total Net Return
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Holding Period Return
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Annualized Return
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Equity Multiple
About This Calculator
The Holding Period Return (HPR) Calculator measures the total return on a real estate investment from purchase to sale, combining all three sources of real estate return: cash flow (monthly income), appreciation (price increase), and equity paydown (mortgage principal reduction).
Holding Period Return (HPR) = (Total Profit ÷ Total Invested) × 100. The annualized version uses the compound annual growth rate formula to show what the equivalent annual return is — making it comparable to other investment benchmarks.
Equity Multiple is another key metric: Total Value Received ÷ Total Invested. A 2.0x equity multiple means you doubled your money. Institutional real estate investors typically target 1.8–2.5x equity multiples over 5-year holds.
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Frequently Asked Questions
What is holding period return in real estate?▼
Holding Period Return (HPR) is the total percentage return on a real estate investment from purchase to sale. It includes all cash flows (rental income minus expenses) plus the gain or loss from the sale. Formula: HPR = (Total Profit ÷ Total Cash Invested) × 100.
What is a good annualized return for real estate?▼
Strong real estate investments typically deliver 10–15% annualized returns over 5–10 year holds when combining cash flow, appreciation, and leverage effects. The S&P 500 averages about 10%/year — real estate that matches or exceeds this with lower volatility is generally considered excellent.
What is an equity multiple in real estate?▼
Equity multiple = Total Distributions ÷ Total Invested Capital. A 2.0x equity multiple means you received $2 for every $1 invested. Common benchmarks: 1.5x over 3 years is decent; 2.0x over 5 years is strong; 3.0x+ over 7–10 years is exceptional.
How does leverage affect holding period returns?▼
Leverage amplifies returns significantly. A 20% down payment means you control $500K of property with $100K. If the property appreciates 20%, you've gained $100K on a $100K investment — a 100% return on capital, not 20%. This leverage effect is why real estate generates much higher returns on invested capital than on total property value.
When should I sell an investment property?▼
Consider selling when: property has appreciated significantly and returns on sale proceeds could be deployed more effectively elsewhere, maintenance costs are escalating beyond income growth, the local market has peaked, you want to consolidate or diversify, or you can do a 1031 exchange into a higher-performing asset.
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