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The basic formula to calculate any return on investment is the same. First, you need to take the total amount of annual earnings and subtract it from the cost of the investment to get the net profit.\u00a0<\/b><\/p>
Then you divide the net profit by the total cost of investment to get the ROI.<\/b><\/p>
ROI\u00a0 = Total Annual Earnings On The Investment \u2013 Total Cost Of Investment \/ Total Cost Of Investment<\/b><\/p>
For example: If you purchase a stock of $2,000 and sell it after a year for $3,000. According to the ROI formula, your ROI would be:<\/b><\/p>
ROI = 3000-2000\/2000 = 1000\/2000 = 0.5 or 50%<\/b><\/p>
The above example may look easy and simple as it is for straight investment without adding any operational or maintenance costs.\u00a0<\/b><\/p>
To understand how to calculate ROI on the rental property, you need to determine how the rental property was acquired in the first place.<\/b><\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t