# @samgrayrealestate on Instagram

- **Type:** Image
- **Original URL:** https://www.instagram.com/p/C7PyJXLAil-
- **Gondola URL:** https://gondola.cc/posts/17893892-samgrayrealestate-instagram
- **Thumbnail:** https://img.gondola.cc/tr:w-,h-,fo-auto/thumbnails/19d1c72354.jpg
- **Posted:** 2024-05-21T22:04:31.000+00:00
- **Account Owner:** Sam Gray | Nashville Realtor (@samgrayrealestate) — https://gondola.cc/samgrayrealestate

## Caption

💰 Return on investment (ROI) is the percentage of your total investment in a property you can expect to receive in a year. For example, if your ROI is 10 percent, you can expect to receive 10 percent of your investment back in 1 year. If you invested $100,000 into a deal, you could receive $10,000 in 1 year. This is calculated by multiplying the invested amount ($100,000) by 10 percent (.10), which equals $10,000. ROI only refers to cash flow (the investment property’s net income) after accounting for all associated income and expenses. Other income factors in real estate, like appreciation, paying down debt, and many more, are not considered and calculated when describing ROI. We are only talking about the cash flow portion of your profit and nothing else.

ROI in real estate is also called a “cash on cash” return. You develop a “cash on cash” return by dividing your yearly profit by your invested money, known as your basis, which includes all your expenses such as the down payment, closing costs, rehab costs, holding costs, etc.

To calculate your ROI, you will take your monthly cash flow, multiply that amount by 12, and divide that number by your basis.

Here is an example: 

You have invested $50,000 in an investment property. After expenses, the property cash flows $400 a month.

$400 x 12 = $4800

$4800 / $50,000 = 9.6% (ROI)

This means you would earn back 9.6 percent of your yearly investment. If you held onto the property for 30 years, you would have a total ROI of 288 percent.

Understanding these terms and calculations is essential when determining and calculating your ROI.

If you’d like to learn more about investing in real estate, follow me for expert tips and insights on the Nashville market! ☝️

#nashvilleinvesting #realestateroi #cashflowproperties #investinnashville #nashvilledevelopment

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## Tags

realestateroi, nashvilleinvesting, cashflowproperties, nashvilledevelopment, investinnashville

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