ROI Imóvel para Aluguel

Rental property ROI

Return on investment for a rental property pulls from two cash streams at once, the rental yield and the appreciation. Put together, that's ROI = (net annual rent + appreciation) / purchase price × 100%. In practice most investors look at it through two lenses. The first is cash-on-cash, net annual cash flow divided by the equity you actually invested (down payment + closing costs), which tracks the real money coming in against what you put down. The second is total return, which folds in the appreciation you haven't realized yet. Run the numbers on a R$ 300k property: R$ 2,200/month rent, R$ 4k/year costs, R$ 70k down plus R$ 12k in fees. Net annual rent works out to R$ 22,400. Cash-on-cash = 22,400 / 82,000 = 27.3% with no financing, though once a mortgage is in the picture the debt service swallows most of it. For Brazilian residential property, cash-on-cash usually settles between 3% and 6%, while appreciation over the long haul tends to follow IGP-M.

Applications

ROI helps you weigh whether buy-to-let makes sense, stack a property up against FIIs or Tesouro IPCA+ (which right now pay real rates north of 6% and skip the management headache), and map out retirement income from real estate. Say a property hands you 4% cash-on-cash and another 4% in appreciation. That's an 8% nominal total return, and it only holds up if you'd rather have leverage and a physical asset than liquidity.

FAQ

Cash-on-cash or total return? Reach for cash-on-cash when you're planning income (FIRE, retirement) and total return when you're building wealth. Each one tells a different story.

Why subtract costs? In Brazil, IPTU, condominium fees, maintenance, vacancy, insurance and management together chew through 20% to 40% of the gross rent. Gross yield makes things look rosier than they are.

Does appreciation count if I don't sell? On paper it does, and it works as collateral too, but the bills get paid out of cash-on-cash. That's why plenty of investors keep the two figures separate.