WHY DO PEOPLE INVEST?
The answer is simple, people invest to increase their wealth.
Reasons for investing differ from one to another but making money is usually the basis of all investments. Investing may take many forms, some prefer to buy gold, or save in a bank, and others invest in real estate.
If you’re the one who chooses to invest in real estate, so this article is for you.
Investing in real estate can be in buying land, property, or commercial unit. Investors buy properties to make money through rental income or to sell them after a short time and make a profit.
When you decide to buy a property it’s crucial to know how much can you gain from this investment. We call this ROI (Return On Investment)
HOW TO CALCULATE ROI FOR YOUR PROPERTY?
That’s simple
1- Calculate your expenses ( the total of your monthly expenses x 12 months)
2- Calculate your return – the total expenses you pay to get the net profit you received
3- divide the net on the total amount you pay for this investment and multiply by 100 to get the percentage.
Suppose you bought an apartment for 300000 EGP, you rent it for 2500 EGP per month, but you have to pay 200 EGP per month for services. Your ROI is your net profit per year/amount you paid to buy the property.
Let’s do it together 2500-200= 2300 ( this is the net you get per month)
Your return per year is 2300 x 12=27600
ROI = (27600/300000)x100 = 9.2%
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