Return on Investment vs Return on Equity
Which is More Important: Return on Investment or Return on Equity?
There are many ways to calculate the value of a real estate investment: return on investment, cash-on-cash, internal rate of return and more. Individuals should study a variety of different financial ratios before investing in rental property.
One calculation, return on equity (ROE), provides important insights about the impact of changes in the market and shifts in commercial real estate trends. Savvy property investors need to continually evaluate how these outside factors could affect the value of their property. Read on to learn more on how to calculate return on equity and use ROE data to make key investment decisions.