How To Do a Real Estate Investment Profit Calculation
This calculation is the one that real estate investors hope to utilize. It is used when a property is sold for more than the purchase price. know it so that you can help clients to determine possible returns.
Time Required: 5 minutes
- Subtract the purchase price from the net from the sale of the property. Example: Property is sold for $250,000 after commissions and expenses to close. It was originally purchased for $210,000.
$250,000 -$210,000 = $40,000
- Divide the profit amount by the purchase price.
$40,000 ÷ $210,000 = 0.19 or 19% Profit
What You Need:
- Normal calculator
More on Profits in Real Estate Investment
Let me link you to some other articles I've written which point out the great benefits and profit potential related to real estate investing. Consider it a quick course on Real Estate Profits 101:
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If you're new to or thinking about real estate investing, there's a lot of great information in those articles.