Basic ROI  

 

How to calculate Basic ROI with Micro Market Forecasts
The expected change in Real Estate prices has the most influence on ROI.

 

In real estate, the forecasted change in values, or the expected value changes, has the greatest influence on your investment.  Will your property and the Micro Markets go up or down in value in the next 24-Months? 

 

Below are some basic tables on how to user your or our forecasts to calculate Basic ROI.   In real estate, there are two core ways that returns are made.  Changes in value, or changes in Cash Flow. The trick to calculating your ROI, is to have the right inputs and local forecasts. Simply enter you data into the worksheet and choose the numbers with the highest confidence.

 

Here is a sample table on how this works.

 

Basic ROI – Table 1

 

 

 

Simply enter in the Purchase Price and your Down Payment.  Then enter our auto-fill as Pro Members of Home Value Predictor, the Block Group (GB) and Census Tract (CT) forecasts and their corresponding Confidence Levels.   Then pick the forecasts with the highest Confidence, and enter the best forecast numbers into the bottom row.

 

The formula for ROI: is (Income from Investment - Cost of Investment) / Total Cost of Investment = ROI
In basic ROI, the formula is (Income / Cash Out of Pocket) or (Percentage Gain in Value / Down Payment)

So once you know your expected change in value and down payment, simply let the worksheet calculate your Basis ROI.

 

The added benefit of having an ROI table, and forecasts that go up and down as does the market, is that you know when to sell your investment also.  The biggest risk in real estate is assuming present value or an appraisal is enough to assess risk.  Combined with the assumption that the future will go up in value at a standard number. 

(Present Value + Assumed Forecast = HUGE RISK)

 

Increase your profits and ROI, with Home Value Predictor.

 

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