What is Return on Investment (ROI) in Real Estate Business?

What is Return on Investment (ROI) in Real Estate Business?

In the world of investments, RETURNS remain one of the most important components that every investor must pay close attention to. Investments are made to the end that returns might be generated over time.

Return on Investment also abbreviated as ROI, is a measure of how much money or profit made on an investment as a percentage of its cost. 

In other words, ROI is a degree of the profit made on a particular investment in relation to investment capital.

As an investor in real estate or other business sectors, ROI is often used to measure and determine the profitability metric to evaluate how well an investment has performed over time.

The obtained results can act as a guide to compare and aid in the decision making process to determine and rank your investments in different assets or projects according to their value.

Here is a breakdown of how you can calculate your Return on Investment (ROI) in any business including the real estate business;

Investment Net Profit
—————————-   X 100  =  % Return on Investment (ROI)
Investment Capital
INVESTMENT CAPITAL = Total Amount Invested
NET PROFIT = Current value of the investment MINUS Investment capital
To calculate ROIDIVIDE the NET PROFIT by the INVESTMENT CAPITAL then MULTIPLY the result by 100.

The result should be represented as a percentage (%).

Here is a practical example of how to calculate ROI using Nation’s View Estate as a case study.

As at October 2020 this property was selling for N4.5 Million Naira and as of today 28th of October 2021 it is valued at N5.5 Million.

NET PROFIT (N5.5M – N4.5M) = N1 Million
ROI = 1,000,000
           ————-    x 100 = 22.2%
The above calculation confirms to you that in less than a year, investors in the Nations View Estate have made a ROI of over 20% without having to move a finger.

As an organization, we remain committed to ensuring that all our investors are guaranteed satisfaction and maximum returns on their investments.

However, diversifying your land banking portfolio to include different ranges of products that we offer affords you the opportunity to earn multiple returns on investment.


For more information, please call 09155555309

Read Also: Don’t invest with any Real Estate Company without reading this

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