11/09/2026
Olive Educational Segment: Understanding ROI (Return on Investment) is fundamental to making smart real estate decisions. ROI measures how much profit you earn on a property relative to what it cost you to purchase and maintain.
How to Calculate Your Real Estate ROI (and Why It Matters)
The Simple Formula:
ROI = (Net Annual Profit ÷ Total Cash Invested) × 100
📝 Let’s work through an example together:
The Setup:
• Purchase Price: KES 100,000
• Cash Out-of-Pocket (Down payment + Closing costs): KES 25,000
• Rental Income: KES1,200/month (KES 14,400 a year)
• Annual Expenses (Mortgage, Taxes, Insurance, Repairs): KES 9,400 a year
Step 1: Find your Net Annual Profit
Income - Expenses = Net Profit
KES 14,400 - KES 9,400 =
KES 5,000 per year
That means your initial cash investment yields a 20% return every year in cash flow alone—not counting long-term property appreciation or tax benefits!
Check out on our next post on the key Takeaways for Buyers and Investors
Joan Wanjiku Mary N. Njogu Kelvin Omariba
