CalculateRealEstateROI

Operations

Yield on Equity

Annual cash flow ÷ current equity (not cost basis) — measures whether trapped equity earns its keep.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Core concepts

Mark-to-market discipline

Current equity, not what you paid.

Redeploy trigger

YoE below 4% suggests refi or 1031.

Examples

  • $50k cash flow / $1.2M current equity = 4.2% YoE → consider refi.

Practical applications

  • Mature portfolios.
  • Annual portfolio review.

Common mistakes

  • Anchoring on cost basis.
  • Ignoring trapped equity drag.