Return on Equity (ROE) in Real Estate

Archived in the category: Real Estate Terms & Definitions
Posted by admin on 24 Sep 12 - 0 Comments

Return on equity is one of the financial measures used as well on other types of investments. In Real Estate analysis the return on equity means a ratio between cash flow after taxes (CFAT) and the initial investment. ROE is calculated for the first year typically and is expressed as a percentage. It is advisable to calculate this measurement for other years as well, and in case of its increasing decline over the time, resale of the property can be evaluated.

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