What is a Gross return on Investment?
In real estate terms people buy property for different reasons. Normally we buy a home or an apartment to live in or some times if we are fortunate enough we may have a home/apartment as a holiday location.
When you buy a property as an investment you will receive a financial return on your Capital while the property is occupied. An investment property is not limited to residential real estate, as a matter of fact people or parties look at commercial real estate for investing as this segment of the market provides alternative scope for investors, we will cover this topic at a later date.
Accordingly the law differs in different states on how you disclose your financial return from your investment,your Accountant/Financial Advisor will assist you with this matter, but the fundamentals of achieving a Gross rent remain the same.
So why do we refer to it as a Gross return?.
A Gross return on investment are the monies payed to the property owner by the tenant who occupies the property before any expenses and taxes have been deducted. The Gross return may be illustrated as a % rate on investment also known as a return or Capitalisation rate.