This is Terrio Media.

Alright so I'm going to show you how to calculate return on investment and then show you how to make that

ROI grow.

I've been doing this for my clients at Epic Real Estate and Cash Flow

Savvy for a decade now, so let me show you how it works on today's

episode of Financial Freedom Friday. All right, so if you like the idea of escaping the rat race sooner rather than later,

go ahead and click the subscribe button for me and then click that little bell

icon so that way you don't miss out on future financial freedom episodes right

here on the epic real estate investing show. Okay return on, frequently referred to as ROI. Well I'm going to go over how to

calculate that in just a second, but first, what is it? ROI? Well, it measures the gain or loss generated on an investment relative to the amount

of money invested. Basically, it tells you how hard your money is working for you. The

higher the number, the higher the number number the harder your money is working.

And so, you know, you work hard for your money, right? So it's only fair, it returns the favor and you want to make

sure it's working as hard as possible for you. So here's how you calculate this.

Let's say you bought this house

right here for $100,000 and it rents for $1,000 per month. We'll multiply that by 12

to get your gross annual income of 12,000 bucks. Then we need to subtract the property's expenses, so we've got taxes and

insurance and maintenance and vacancy and management and a good rule of thumb for this is

40 percent. That's just good quick and dirty math. And that leaves us with a net operating income of $7,200.

So you divide that by what you paid for the property, $100,000,

and that would leave you with 7.2%.

That's your cash on cash return on your $100,000 investment. That's the calculation. It's

...