How to Accurately Estimate ROI

[Brianna H.]

Am I the only one that doesn't feel like the ROI calculations are good enough? I have expenses that come up at different times of the year (taxes, insurance, etc) and then I am saving for capex, random repairs, etc.

My current strategy for determining ROI is to use the following formula:

principal paydown / initial investment

I feel like this strategy is more conservative, but still not very accurate. Does anyone else use an alternative way to calculate ROI? Maybe I should be calculating ROI on a monthly basis and taking my average? Thoughts?