Real Estate
Real Estate ROI: How to Analyze Your Next Deal
Karen Miller
October 20, 2025
8 min read
Real estate can be a great wealth builder, but only if the numbers make sense. Don't let emotions cloud your financial analysis.
Cash-on-Cash Return
This measures the annual pre-tax cash flow relative to the total amount of cash invested. It's a more accurate measure of performance than simple appreciation.
Factoring in Vacancy and Maintenance
Always assume at least a 5-10% vacancy rate and set aside funds for ongoing maintenance. If the deal doesn't work with these assumptions, it's not a good deal.