1-What is (ROI) in real estate?

ROI stands for Return on Investment.

The basis of all investments – stocks, bonds, or real estate – is to make money and increase wealth over time. So it’s safe to say you’re hoping to turn a profit from investing in real estate.

 ROI (Return on investment) measures how much money, or profit is made on investment as a percentage of the cost of that investment. It shows how effectively and efficiently investment money is being used to generate profits. Knowing ROI allows investors to assess whether putting money into a particular investment is a wise choice or not.

2-The Importance of ROI for Real Estate

Knowing the ROI for any investment allows you to be a more informed investor. Before you buy, estimate your costs and expenses, as well as your rental income. This gives you a chance to compare it to other, similar properties.

Once you've narrowed it down, you can then determine how much you'll make. If at any point, you realize that your costs and expenses will exceed your ROI, you may need to decide whether you want to ride it out and hope you'll make a profit again—or sell so you don't lose out.

 

3-Calculating ROI on Real estate

Calculating ROI on Real estate property is very important; essentially, the return on investment represents the potential of income-producing assets.

 Investors who know the rate of return on the money they’ll invest can better decide whether or not to undertake the investment.

This is why real estate ROI has become synonymous with today’s best indicators for determining
whether or not real estate deals are worthwhile. A higher ROI suggests the profits you’ll
receive from an investment property compare favorably to its cost.

Another purpose of ROI in real estate is for comparison. A beginner real estate investor planning to buy his/her first rental property should use the ROI calculation to compare the numerous investment opportunities available in the housing market. Naturally, not all homes for sale have the same probability for profit as rental properties. By calculating ROI on each one, you are able to determine which one is best to invest in and make smart decisions accordingly. Seasoned real estate investors also use ROI to compare different investments within a portfolio. Usually, the investment with the largest ROI is prioritized.

4-Formula for Calculating ROI on an investment property

Investopedia offers a deceptively simple calculation to determine ROI:

ROI = (Gain from Investment – Cost of Investment)/Cost of Investment

While this may seem to be a pretty straightforward calculation, the truth is several factors figure in, including expenses like repair and upkeep, and how much money with interest was borrowed to make the investment.

According to Investopedia, ROI will typically be better if the investment cost is lower, but financing terms can also have an impact, so the importance of finding favorable interest rates cannot be overstated.

So the best thing is to use an online ROI calculator.

The link for an online ROI: https://www.mortgagecalculator.org

5-Why investing in Hurghada’s real estate market increases your chances for a higher ROI rate?

The first and most important factor in real estate investment is unsurprisingly the property’s location.

Hurghada’s strategic location is only a few hours flight from Europe’s major capitals and many other countries, Hurghada has good access to many of Egypt’s natural wonders, historical sites, and archaeological treasures, The ancient temples of Luxor and Aswan are only a ride away, Nile Valley is a a convenient two-hour drive away and Cairo is only an hour flight from Hurghada international airport.

Hurghada’s unique location is globally celebrated for its dazzling coral reefs, crystal clear waters, and ideal year-round temperatures of 21º to 25º Celsius; it is the home to more than 200 colorful reefs and over 1,000 invertebrate species and is known as one of the globe’s greatest dive sites.

Hurghada offers a variety of water-sport activities including fishing, kite-surfing, dolphin watching, and snorkeling.

The second factor that affects what is a good ROI on investment property is whether the property was paid for in cash or financed via a mortgage.

Hurghada is a touristic city and properties are always in high demand whether you are thinking to move to Hurghada or buy a second holiday home.

Hurghada offers a variety of luxurious beachfront resorts and self-contained resorts to choose from with the ability to pay in installments for up to 8 years.

As you don’t have to pay all the payment upfront and all at one time makes investing in Hurghada a perfect choice providing you with a high return on investment rate, as you will save money spent on hotels & holiday rentals and invest it in owning a property for your vacation and holidays with using it as an Income-Producing Investment by renting your property for the rest of the year to help you pay your installments.