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Return on Investment
Return on investment (ROI) compares an investment's profit with the amount invested, expressed as a percentage.
Return on investment (ROI) compares an investment's profit with the amount invested, expressed as a percentage. It measures profitability; the income measure, investment basis, and reporting period should be identified when presenting it.
Property operations example: label the period, included costs, and whether the figure comes from actual results or a projection. A percentage shown without its basis does not establish a property's realized performance.
Source: Business Development Bank of Canada, Return on investment (ROI) glossary.
Frequently Asked Questions
Is ROI the same as total rent collected?
No. Rent receipts are revenue. ROI relates profit to invested capital, so expenses and the chosen calculation basis matter.
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