What is Return on Investment (ROI)?

ROI stands for Return on Investment, which is a method to measure the performance of an investment. To calculate your profit, take the the total return on investment and subtract the cost of the investment. To calculate that as a percentage, take the net profit and divide it by the cost of the investment. Example:

2021-07-23T19:09:24+00:00July 23rd, 2021|, |

What is Cash on Cash Return (CoC)?

Cash on Cash Return (CoC) is the cash income returned on the cash invested.  To calculate the cash on cash return, take your net cash flow (after all expenses) and divide it by the cash initially invested. Example: $100,000 property purchase $30,000 cash invested for down payment, closing costs, rehab, etc.. $12,000 Annual Gross Rent

2021-07-23T19:09:40+00:00July 23rd, 2021|, |

What is a Cap Rate?

A cap rate is the rate of return an investment is expected to generate based on the income received.  A higher cap rate is a higher ROI and sometimes that also sometimes means more risk, a lower cap rate is a lower ROI that also sometimes means less risk.  To calculate this number, divide the

2021-07-23T19:10:13+00:00July 23rd, 2021||

What is Net Operating Income (NOI)?

Net Operating Income is the income you receive after all expenses are paid. Example: $12,000 Rent Received Annually (this is the Gross before you remove expenses) $6,000 Annual Expenses (including debt service, taxes, insurance, property management fees, vacancy, maintenance, etc..) $6,000 Annual Net Operating Income after all expenses are taken out  

2021-07-23T19:03:42+00:00February 28th, 2016|, |
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