Formula
ROI = (Net Gain / Total Investment) x 100. CAGR = ((Net Value / Initial Investment)^(1/Years) - 1) x 100.
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Calculator Guide
How Property ROI Is Calculated
Understand absolute ROI and annualized returns by combining appreciation, rental income, and holding costs.
Example Calculation
- Buy Price: Rs 70 Lakh
- Sell Price: Rs 90 Lakh
- Holding Period: 6 years
Absolute ROI and CAGR together provide a clearer decision picture than one metric alone
Investment Insights
- Include all carrying costs for realistic return evaluation.
- CAGR helps compare property against alternate investment classes.
- Scenario analysis for exit value is essential before investing.
FAQs
Is ROI enough to judge property investment?
Use ROI with risk, liquidity, leverage cost, and local demand indicators for full analysis.
What is the difference between ROI and CAGR?
ROI is total return over period; CAGR is annualized return rate across years.
Should rental income be included in ROI?
Yes, for investment properties rental cash flow is a core return component.