ProAPOD’s web-based real estate calculator has just been updated to include a calculation for rate of return as well a calculation for annualized rate of return.
Rate of return is considered the ultimate measurement of an investment’s success and is regularly used in different markets to describe and compare how investments have performed. The inclusion of an annualized rate of return makes investment comparisons more valid because it reflects the return based upon each one-year holding period.
The form requires just three entries: Original cost, current value, and holding period. So the calculation can be made in virtual seconds.
The formula is straightforward: Rate of Return = (Current Value – Original Cost) / Original Cost . To annualize the return the result is divided by the number of years the property has been held.
As with all the other calculations provided in our real estate calculator, a definition and formula is automatically displayed on the form for this calculation so you can learn it as you compute.
Of course there is no charge for this update. Simply log in to the real estate calculator as usual and find this calculation in the left menu under Investment.