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