ROI - Return on Investment (ROI) is the annual profit (income minus costs) generated by an asset, divided by the cash you've put in.
For example, if the monthly positive cashflow (or profit) after all costs is say £200, the annual profit would be 12 times that, or £2,400. And if the money you left invested in the property was £15,000, then the “ROI” would be 16.0%.
FINAL THOUGHT - The importance of ROI for Property Investing. Knowing ROI for any investment allows investors to be more informed. Before you buy, estimate your costs and expenses, as well as your rental income. This gives you a chance to compare it to other, similar properties.
Comments