What Is It?
A rate of return of a real estate transaction based on comparing the total profit from your investment to the total invested cash.
For a rental property, the ROI takes into account the cumulative cash flow, equity accumulation and loan paydown and shows the total cumulative return on your invested capital, if you were to sell the property at a given point in time.
For a flip, the ROI shows the total return on your invested capital after you complete the rehab and sell the property.
How Is It Calculated?
You can learn more about the Return on Investment on our blog. Read this article about ROI for rentals, and this one about ROI for flips.