Are you investing in real estate without knowing exactly what your money could return? Then you need to understand ROI — Return on Investment. It is one of the simplest ways to measure whether an investment is profitable.
The basic formula is:ROI = (Profit ÷ Investment) × 100Here’s a simple real estate example. Imagine you buy a property for ₦10 million and later sell it for ₦13 million.Your profit is:₦13M − ₦10M = ₦3MNow calculate:ROI = (₦3M ÷ ₦10M) × 100 = 30%That means your investment generated a 30% return before considering expenses such as taxes, legal fees, agency fees, maintenance, or other transaction costs.
Understanding ROI helps you compare different properties, identify potentially better investments, and make decisions based on numbers rather than emotions. Before putting your money into any property, ask: “How much am I investing, how much can I realistically make, and what is my expected ROI?”Know your numbers. Invest with clarity. Build wealth intentionally.
