Enter what money goes out and comes in, and when. See whether the deal beats your required return (NPV), and the single annualized return it actually produced (IRR) - the real way to evaluate a rental property or any multi-year investment.
NPV asks: "discounted back to today at my required return, is this deal worth more or less than what I'm putting in?" A positive NPV means the deal beats your discount rate; negative means it doesn't, even if the raw total of future cash looks impressive. IRR asks a related but different question: "what rate would make this deal exactly break even against itself?" It's the single annualized return baked into the actual cash flows - down payment now, income over the years, proceeds at the end - not an average, and not something you can look up, only solve for.
NPV has a straightforward formula: sum each cash flow divided by (1+rate)year. IRR is the rate that makes that sum exactly zero - but with more than two cash flows, there's no algebraic way to isolate it. This tool solves it the way Excel does internally: Newton-Raphson iteration, refining a guess using the slope of the NPV curve until it converges on the rate where NPV crosses zero, with a bisection fallback for cash-flow patterns where that doesn't converge cleanly.
Buy for $300,000 (year 0, entered as negative - it's money going out). Net rental income of $24,000 a year for 4 years. In year 5, sell the property, and that year's cash flow is rental income plus sale proceeds combined. Solved: an IRR of about 15.36% - the single annualized return the whole deal produced, purchase to sale. Compare that number against what else you could have done with that $300,000 to see if the deal was actually worth it, not just profitable in absolute dollars. Free calculators that handle IRR at all almost always stop there, at an all-cash purchase - this one goes further, with a dedicated mode for the way most people actually buy investment property: a down payment, a mortgage payment eating into rental income every year, and the remaining loan balance paid off out of the sale proceeds. That is the levered, equity-level return, and it is usually the number that actually matters.
This is the same present-value principle explained on the retirement calculator - just applied to cash flows that move in both directions over time instead of one lump sum. For growth expressed as a single annual rate instead of a cash-flow schedule - a salary, an investment, a business metric - see the CAGR calculator.