CalculateRealEstateROI

Cash Flow

Principal Paydown

The portion of mortgage payment that reduces the loan balance.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Plain-English explanation

Hidden return — your tenant builds equity for you each month.

Examples

  • ~$2,400/yr principal paydown in year 1 of a 30-yr $200k loan at 7%.

Common mistakes

  • Forgetting principal paydown when calculating total return.

Related questions