Can someone help me calculate my ROI

Question

Can someone help me calculate the ROI per year that my wealth will increase?

If i buy an appartment for 45.000$ with a downpayment of 15.000$. The rent is 250$ a month and the property value increases yearly by 5%. How much will my wealth increased in 5 years.1

12x250x5=15.000

15.000x5x1.05=19.144$

Do i add the 2 15.000+19.144$=34.144$

And then divide 34.144$ to 5=6.828$

and 15.000.......... 100

6.828........... x

x=(6828x100)/15000=45%

My wealth will increase by 45% per year. Is this how you do the calculation?

Account Closed · Answer

Tell us your mortgage, tell me the net income on the property

Bogdan Masca · Answer

What do i write in there year 1 year 1. I wrote 15.000$ the downpayment and 480$ a year wich the ammount of rent

Alexander Felice · Answer

yes it does, you use the final year of calculation as the cash inflow at the sales price

Bogdan Masca · Answer

No that is not what i am looking for as it dosen`t take into consideration the property appreciation over the years

Alexander Felice · Answer

for this type of calculation I would recommend you use an IRR calculator. It's a much better tool to analyze cash flow and wealth over a set period of time.

Bogdan Masca · Answer

This are the going rates for appartments here in Romania there nothing to negotiate you can get a positive cashflow of about 40$ thats it. I don`t have such plans this is just a mathamatical issue i need to know how to calculate my potential wealth increase over the years?

Sean Carroll · Answer

@Bogdan Masca I personally think the deal is to slim and you're playing and appreciation game. What's your exit if the market goes south? What happens when you have a large repair?

What are the financing terms?

Why is the rent so low?

What's the average cap rate for the area?

Victor Evans · Answer

@Bogdan Masca , try using the BP rental property calculator to make sure that you've considered all expenses involved in acquiring, holding, and disposition of property. If you still have any question after you try the calculator, I'll be glad to help...

Bogdan Masca · Answer

the net income is 40$ a month on the property

Can someone help me calculate my ROI

Most Popular Reply