Cash on Cash ROI (CoCROI) vs Total ROI

[Benjamin Sol Ignacio]

What do people here with properties use most to value their "ROI"? Do most of you guys do a CoCROI or an ROI that includes Cash + Speculated/Conservative Appreciation + Principal Pay Down + Tax Benefits?

[Chris Coleman]

@Benjamin Sol Ignacio

Personally, I prefer to know my CoC using only "real" cash that I can put in the bank. So on SFR's, in years which I am holding the property and not selling or doing any cash-out Refi, then I use simple CoC. Equity is not real cash during those years if you're not using it somehow, so I don't count it in my ROI.

When the asset is sold (or cash out refinanced), then the equity is realized and so then I include it in the ROI.

However, from a business perspective, note that when you're calculating you're ROI in communicating with banks or investors, then you should include both.