Investment Return

Investment return is the percentage an investor receives on an investment. Generally, this refers to net proceeds after the sale of a property. However, it can also refer to regular income received on a property leased out to others. Their investment includes the purchase price and carrying costs for mortgage payment, insurance, and taxes, as well as any money invested to improve the property. For example, if an investor buys a property for $100,000, and he puts improvements into the property of $25,000. While making those improvements, he has carrying costs of $5,000. All told, his investment in the property is $130,000. He sells the property for $150,000. To calculate the investment return, take the amount of profit, $150,000, and subtract the investment of $130,000 to get $20,000, and then divide it by the investment amount of $130,000. In this example, the investment return is 15.3 percent.