Rental Return: How to Calculate ROI on Rental Property and Whether It's Worth Investing
Warren Team
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Key terms
- VestingThe process by which an employee earns the right to employer contributions to retirement accounts over time. Common vesting schedules include immediate, graded, or cliff vesting.
- Return on Investment (ROI)A measure of investment profitability, calculated as (gain minus cost) divided by cost, expressed as a percentage. A $1,000 investment returning $1,200 has a 20% ROI.
- Net WorthThe total value of your assets minus your liabilities. A key measure of financial health that should ideally increase over time as you build wealth.
- Total ReturnInvestment performance including both price appreciation and income (dividends or interest). A stock rising 8% with 2% dividends has a 10% total return.
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