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Return on Investment Explained (ROI)

Return on Investment Explained (ROI)

Let’s talk about one of the most critical real estate terms out there: return on investment aka ROI. If you have any investments or you’re looking at real estate, you’ve probably heard ROI thrown around a bunch. But what does it actually mean and why should you pay attention?

ROI is the amount of money you get back on an investment you’ve made–like real estate. For example, if you buy a house for $350,000 and then, after a few years, sell it for $450,000, you’ll have made all of your money back plus $100,000. That’s a pretty good investment.

But ROI isn’t just important when you’re buying or selling a house. You should also make sure you consider ROI when you’re doing home renovations or putting money into your home.

You want to make sure that you’ll get the money you put into renovating your home back when you sell. This is why kitchen remodels are so popular—you can almost always make all of the money back and more.

On the other hand, renovating your home to include a home gym or a rose garden in the backyard might not make buyers want to pay more for your home. As a result, you could lose money by doing those renovations. Recouping costs and making a profit is the name of the game in real estate.

Whether you’re buying, selling, or renovating, ROI is important to keep in mind so you can make smart money decisions that benefit your financial future. Want to talk about finding the best ROI remodels for your home? Just sign up for our emails!

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