📊 What Are ROI and Yield? (Simple Explanation for Beginners)
Introduction
In real estate investing, you’ll often hear the terms ROI and Yield.
For beginners, these may sound complicated—
but they’re actually very easy to understand.
This guide will break them down in a simple way 👍
💸 What is ROI?
ROI (Return on Investment)
means the total return you get from your investment.
In simple terms:
👉 How much profit you make compared to how much you invested.
📌 ROI Formula
ROI = Net Profit / Total Investment × 100
🧠 Example
- Buy a condo for 2,000,000 THB
- Sell it for 2,400,000 THB
- Profit = 400,000 THB
👉 ROI = 20%
✔ Who is it for?
- Property flippers
- Investors focusing on resale profit
🏠 What is Yield?
Yield
means the return you get from rental income.
In simple terms:
👉 How much % you earn per year from rent.
📌 Yield Formula
Yield = Annual Rental Income / Property Price × 100
🧠 Example
- Buy a condo for 2,000,000 THB
- Rent it out for 10,000 THB/month
- Annual income = 120,000 THB
👉 Yield = 6%
✔ Who is it for?
- Rental investors
- People looking for passive income
🔍 ROI vs Yield: What’s the Difference?
| Comparison | ROI | Yield |
|---|---|---|
| Measures | Profit from investment | Rental income |
| Timing | When selling | Per year |
| Best for | Flipping | Renting |
| Risk | Market-dependent | Tenant-dependent |
⚠️ Common Mistakes
- Looking at yield without deducting expenses
- Ignoring maintenance fees, taxes, and repairs
- Expecting ROI exactly as planned
👉 Reality:
Numbers on paper may not match real life
✅ Quick Summary
- ROI = Profit when you sell 💰
- Yield = Income from rent 🏠
👉 Smart investors always look at both
📌 Call to Action
If you’re looking for a property with
good yield + future ROI potential
👉 We can help you find the right one
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