{"id":1373,"date":"2024-02-07T16:34:34","date_gmt":"2024-02-07T08:34:34","guid":{"rendered":"https:\/\/www.99.co\/singapore\/glossary\/?p=1373"},"modified":"2024-02-07T16:34:34","modified_gmt":"2024-02-07T08:34:34","slug":"roi","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/glossary\/roi\/","title":{"rendered":"ROI"},"content":{"rendered":"\n

How to calculate the real ROI of your rental property investment<\/h2>\n\n\n\n

Investing in rental properties can be an excellent way to build long-term wealth and passive income. However, accurately calculating your real return on investment (ROI) is crucial to determine if a rental property is a good investment. The real ROI accounts for all the costs associated with owning the property. Here\u2019s how to calculate it:<\/p>\n\n\n\n

Calculate your gross rental income<\/h3>\n\n\n\n

First, calculate your total potential gross rental income for the year. Take the monthly rent for the property and multiply it by 12 months to get your annual rental income. Be sure to factor in any months where you expect the property to be vacant and not generate income.<\/p>\n\n\n\n

Determine your operating expenses<\/h3>\n\n\n\n

Next, calculate all of your annual operating expenses. This includes property taxes, insurance, HOA fees, regular maintenance, repairs, property management fees, utilities, and any other costs associated with running the rental. Be thorough, as underestimating expenses will skew your calculations.<\/p>\n\n\n\n

Find your net operating income<\/h3>\n\n\n\n

Take your gross rental income and subtract your total annual operating expenses. This gives you your net operating income (NOI).<\/p>\n\n\n\n

Additional reading: <\/em><\/strong>Rental Yield<\/a><\/em><\/p>\n\n\n\n

Factor in your mortgage payments<\/h3>\n\n\n\n

If you have a mortgage on the property, subtract your total annual mortgage payments (principal + interest) from the NOI. This gives your before-tax cash flow.<\/p>\n\n\n\n

Calculate your cash-on-cash return<\/h3>\n\n\n\n

Take your before-tax cash flow and divide it by the total amount of cash you initially invested in the property (down payment + closing costs). This percentage shows your cash-on-cash return.<\/p>\n\n\n\n

Determine your capitalization rate<\/h3>\n\n\n\n

Divide your NOI by the property\u2019s total purchase price. This calculates your cap rate. Generally, a higher cap rate means a better return.<\/p>\n\n\n\n

Consider tax implications<\/h3>\n\n\n\n

Consult with your accountant about tax deductions and obligations to find your after-tax cash flow. This is your real ROI.<\/p>\n\n\n\n

Accurately calculating your rental property\u2019s real ROI helps you evaluate if it\u2019s a good investment for your financial goals. Follow these steps annually to maximize returns.<\/p>\n","protected":false},"excerpt":{"rendered":"

How to calculate the real ROI of your rental property investment Investing in rental properties can be an excellent way to build long-term wealth and passive income. However, accurately calculating your real return on investment (ROI) is crucial to determine if a rental property is a good investment. The real ROI accounts for all the…<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[94],"tags":[218,219,217,216],"class_list":{"2":"type-post","11":"entry"},"acf":[],"yoast_head":"\nROI Definition, Understanding and Why ROI is Important?<\/title>\n<meta name=\"description\" content=\"ROI is an important term that helps you understand real estate industry better. Find the definition and importance of ROI here, we have simplified it for you.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.99.co\/singapore\/glossary\/roi\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"ROI\" \/>\n<meta property=\"og:description\" content=\"ROI is an important term that helps you understand real estate industry better. Find the definition and importance of ROI here, we have simplified it for you.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.99.co\/singapore\/glossary\/roi\/\" \/>\n<meta property=\"og:site_name\" content=\"Property Glossary\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/99dotco\" \/>\n<meta property=\"article:published_time\" content=\"2024-02-07T08:34:34+00:00\" \/>\n<meta name=\"author\" content=\"Azhann\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Azhann\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/roi\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/roi\/\"},\"author\":{\"name\":\"Azhann\",\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/person\/11d17ecc350fdd47219c92f17bddb0af\"},\"headline\":\"ROI\",\"datePublished\":\"2024-02-07T08:34:34+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/roi\/\"},\"wordCount\":337,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#organization\"},\"keywords\":[\"gross rental income\",\"net operating income\",\"return of investment\",\"roi\"],\"articleSection\":[\"Investments\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.99.co\/singapore\/glossary\/roi\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/roi\/\",\"url\":\"https:\/\/www.99.co\/singapore\/glossary\/roi\/\",\"name\":\"ROI Definition, Understanding and Why ROI is Important?\",\"isPartOf\":{\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#website\"},\"datePublished\":\"2024-02-07T08:34:34+00:00\",\"description\":\"ROI is an important term that helps you understand real estate industry better. Find the definition and importance of ROI here, we have simplified it for you.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/roi\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.99.co\/singapore\/glossary\/roi\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/roi\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Property Glossary\",\"item\":\"https:\/\/www.99.co\/singapore\/glossary\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Investments\",\"item\":\"https:\/\/www.99.co\/singapore\/glossary\/investments\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"ROI\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#website\",\"url\":\"https:\/\/www.99.co\/singapore\/glossary\/\",\"name\":\"Real Estate Terms | A-Z Property Glossary\",\"description\":\"Singapore Real Estate Glossary\",\"publisher\":{\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.99.co\/singapore\/glossary\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#organization\",\"name\":\"99.co\",\"url\":\"https:\/\/www.99.co\/singapore\/glossary\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.99.co\/singapore\/glossary\/wp-content\/uploads\/2023\/05\/nnco_logo.webp\",\"contentUrl\":\"https:\/\/www.99.co\/singapore\/glossary\/wp-content\/uploads\/2023\/05\/nnco_logo.webp\",\"width\":192,\"height\":72,\"caption\":\"99.co\"},\"image\":{\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/99dotco\",\"https:\/\/www.instagram.com\/99.co\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/person\/11d17ecc350fdd47219c92f17bddb0af\",\"name\":\"Azhann\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/132b70b288b02bedf3fad5a61b86016dee9c5b8b969f24adfd961dfd8ee82fcd?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/132b70b288b02bedf3fad5a61b86016dee9c5b8b969f24adfd961dfd8ee82fcd?s=96&d=mm&r=g\",\"caption\":\"Azhann\"},\"url\":\"https:\/\/www.99.co\/singapore\/glossary\/author\/azhann99-co\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"ROI Definition, Understanding and Why ROI is Important?","description":"ROI is an important term that helps you understand real estate industry better. Find the definition and importance of ROI here, we have simplified it for you.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.99.co\/singapore\/glossary\/roi\/","og_locale":"en_US","og_type":"article","og_title":"ROI","og_description":"ROI is an important term that helps you understand real estate industry better. Find the definition and importance of ROI here, we have simplified it for you.","og_url":"https:\/\/www.99.co\/singapore\/glossary\/roi\/","og_site_name":"Property Glossary","article_publisher":"https:\/\/www.facebook.com\/99dotco","article_published_time":"2024-02-07T08:34:34+00:00","author":"Azhann","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Azhann","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.99.co\/singapore\/glossary\/roi\/#article","isPartOf":{"@id":"https:\/\/www.99.co\/singapore\/glossary\/roi\/"},"author":{"name":"Azhann","@id":"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/person\/11d17ecc350fdd47219c92f17bddb0af"},"headline":"ROI","datePublished":"2024-02-07T08:34:34+00:00","mainEntityOfPage":{"@id":"https:\/\/www.99.co\/singapore\/glossary\/roi\/"},"wordCount":337,"commentCount":0,"publisher":{"@id":"https:\/\/www.99.co\/singapore\/glossary\/#organization"},"keywords":["gross rental income","net operating income","return of investment","roi"],"articleSection":["Investments"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.99.co\/singapore\/glossary\/roi\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.99.co\/singapore\/glossary\/roi\/","url":"https:\/\/www.99.co\/singapore\/glossary\/roi\/","name":"ROI Definition, Understanding and Why ROI is Important?","isPartOf":{"@id":"https:\/\/www.99.co\/singapore\/glossary\/#website"},"datePublished":"2024-02-07T08:34:34+00:00","description":"ROI is an important term that helps you understand real estate industry better. Find the definition and importance of ROI here, we have simplified it for you.","breadcrumb":{"@id":"https:\/\/www.99.co\/singapore\/glossary\/roi\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.99.co\/singapore\/glossary\/roi\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.99.co\/singapore\/glossary\/roi\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Property Glossary","item":"https:\/\/www.99.co\/singapore\/glossary\/"},{"@type":"ListItem","position":2,"name":"Investments","item":"https:\/\/www.99.co\/singapore\/glossary\/investments\/"},{"@type":"ListItem","position":3,"name":"ROI"}]},{"@type":"WebSite","@id":"https:\/\/www.99.co\/singapore\/glossary\/#website","url":"https:\/\/www.99.co\/singapore\/glossary\/","name":"Real Estate Terms | A-Z Property Glossary","description":"Singapore Real Estate Glossary","publisher":{"@id":"https:\/\/www.99.co\/singapore\/glossary\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.99.co\/singapore\/glossary\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.99.co\/singapore\/glossary\/#organization","name":"99.co","url":"https:\/\/www.99.co\/singapore\/glossary\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/logo\/image\/","url":"https:\/\/www.99.co\/singapore\/glossary\/wp-content\/uploads\/2023\/05\/nnco_logo.webp","contentUrl":"https:\/\/www.99.co\/singapore\/glossary\/wp-content\/uploads\/2023\/05\/nnco_logo.webp","width":192,"height":72,"caption":"99.co"},"image":{"@id":"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/99dotco","https:\/\/www.instagram.com\/99.co"]},{"@type":"Person","@id":"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/person\/11d17ecc350fdd47219c92f17bddb0af","name":"Azhann","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.99.co\/singapore\/glossary\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/132b70b288b02bedf3fad5a61b86016dee9c5b8b969f24adfd961dfd8ee82fcd?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/132b70b288b02bedf3fad5a61b86016dee9c5b8b969f24adfd961dfd8ee82fcd?s=96&d=mm&r=g","caption":"Azhann"},"url":"https:\/\/www.99.co\/singapore\/glossary\/author\/azhann99-co\/"}]}},"_links":{"self":[{"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/posts\/1373","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/comments?post=1373"}],"version-history":[{"count":1,"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/posts\/1373\/revisions"}],"predecessor-version":[{"id":1374,"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/posts\/1373\/revisions\/1374"}],"wp:attachment":[{"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/media?parent=1373"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/categories?post=1373"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.99.co\/singapore\/glossary\/wp-json\/wp\/v2\/tags?post=1373"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}