Return on investment (ROI)
The total gain on an investment compared with what it cost, usually as a percentage. For real estate it can include cash flow, appreciation, loan paydown and tax effects.
Also called: ROI, return, total return
Related terms
Yearly pre-tax cash flow divided by the cash you actually put in, such as the down payment, closing costs and rehab. It shows the return on your own money when using a loan.
Net operating income divided by the property's price or value. It shows the yearly return before financing and is used to compare properties and estimate value.
An increase in a property's value over time from market growth or improvements. It is not guaranteed and is realized only when you sell or refinance.
The money left each month after collecting rent and paying all expenses, including the mortgage. Positive cash flow means the property pays for itself with some left over.