ROI is Return on Investment, one of the most important financial measures of a project.
External Display: This value will be listed on the main page for your investment, and it is a key indicator to addy members to determine how much they want to invest in your issuance. It will also be used in the returns calculator tool that is available to addy members.
Please add this value to 2 decimal places. This value can theoretically be positive or negative, but it would not be a good investment if it was negative!
ROI is calculated as followed:
ROI = (Total Investment Cost / Net Profit) × 100
ROI = (Total Investment Cost / Net Profit) × 100
Where:
- Net Profit = Sum of each years Total Revenue (from rent or sale) - Total Expenses (like maintenance, taxes, and mortgage payments) - debt service - payoff of loan and fees at sale year.
- Total Investment Cost = Purchase price + any additional costs (like renovations, closing costs)
In short, it is all your positive cash flows (funds coming back to the investor) minus all your negative cashflows (funds going out of the investor) divided by all your negative cash flows in the duration of the project.