In order to define the rate of return on investment, or more commonly known as ROI we are also going to explain how it can be calculated and what to look for in the return rate. Investing in property can sometimes be a gamble but if you understand what is the rate of return(ROI), how to calculate it and what is a good rate of return, then your investment should be in good hands.
The definition of return on investment (ROI) examines the profit that investment can bring in percentage from the initial expenses from that investment. A calculated ROI can be related to stocks, real estate, savings accounts or bonds. It helps investors in making better assessments of the potential profit of an investment and whether it is a good investment or not.
In order to calculate the ROI of an investment you take the total return of the investment and divide it from the original cost of investment. You will get a value that represents the percentage of that profit so you multiply it by 100 and add the %.
ROI = ( return on investment / cost of investment ) x 100
ROI = 0.0XX%