ROI (RETURN ON INVESTMENT)
Things to know before putting your investment to some properties in all over the world is how much it the property management will give it back in a period. It’s common in business furthermore property investment you have to know how much is ROI. What’s ROI? If you are new you’ve come to the right place.
In finance, Return on investment (ROI) is the ratio of money gained or lost (realized or unrealized) on an investment relative to the amount of money invested. The amount of money gained or lost may be referred to as interest, profit/loss, gain/loss, or net income/loss. The money invested may be referred to the asset, capital, principal, or the cost basis of the investment. ROI is usually expressed as a percentage rather than a fraction.
ROI does not indicate how long an investment is held. However, ROI is most often stated as an annual or annualized rate of return, and it is most often stated for a calendar or fiscal year
ROI is used to compare returns on investments where the money gained or lost — or the money invested — is not easily compared using monetary values. For example, a $2,000 investment that earns $100 in interest generates more cash than a $500 investment that earns $50 in interest, but the $500 investment earns a higher ROI.
Annual ROI or Annualized ROI
Pay more attention whether it is annual ROI or annualized ROI. An annual ROI is a single-period return, while an annualized ROI is a multi-period, geometric average return.
An annual ROI is the return on an investment over a one-year period, such as January 1 through December 31st, or June 1st 2008 through May 31st 2009.
An annualized ROI is the return on an investment over a period other than one year (such as a month, or two years) multiplied or divided to give a comparable one-year return. For instance, a one-month ROI of 2% could be stated as an annualized rate of return of 24%. Or a two-year ROI of 40% could be stated as an annualized ROI of 20%.
In general, the higher the investment risk, the greater the potential investment will return, and the greater the potential investment will be loss
So you know now if the property management or developer offers variety option of ROI of their product. Such in Bali some developer dare to offer 40% ROI if you buy apartment room in any kind of unit.
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