When calculating the ROI of a property rental which you have bought outright without a mortgage, do you use the current property valuation?
Or do you calculate the ROI of such a property by calculating the initial purchase price of the property?
Say you bought a property 5 years ago for $150,000 and now it is worth $200,000, which figure do you use when calcultating the rental ROI of this property?
- 6 months ago
What you actually paid. Of course, the increased equity is part of the ROI.
- JeffreyLv 76 months ago
You also have to include the net rental income you received.
- A HunchLv 76 months ago
Use the current value.
But unless the property doubled in value in 5 years, it's highly unlikely that you have a positive ROI for a property you paid cash for after 5 years.