Building Wealth Through Rental Properties

A Beginner’s Guide to Real Estate Investing!

Return on Investment (ROI)

Return on Investment (ROI) is a critical metric used by investors to evaluate the profitability of an investment relative to its cost. It is calculated by dividing the net profit (or gain) generated from an investment by the initial cost or investment amount, and expressing the result as a percentage. This metric allows investors to assess the efficiency and effectiveness of their investments, helping them prioritize opportunities that offer the highest potential returns.

Net Profit: The income generated from the investment property minus all expenses (including operating expenses, financing costs, property taxes, and maintenance).

Total Investment: The total capital invested in acquiring and maintaining the property, including the purchase price, closing costs, renovations, and other associated expenses.

Disclaimer: The Return on Investment (ROI) metric provided here is intended for general informational purposes only. It is not intended to serve as financial, investment, or tax advice. Users should independently verify all calculations and consult with qualified financial advisors or investment professionals before making any investment decisions. The accuracy of ROI calculations depends on the completeness and accuracy of the data entered by the user. The creators of this content are not liable for any damages or losses arising from the use or misuse of the ROI metric or any decisions made based on it.