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How ROI Works

ROI (Return on Investment) measures how much profit you make relative to what you put in. In real estate, it combines net rental income and property appreciation.

The Formula

ROI = (Total Return ÷ Initial Cash) × 100

Your total return is net rental income over the hold period plus capital appreciation. Your initial cash includes down payment, closing costs, furnishing, and delivery reserve.

01

Initial Cash Required

The total upfront cash you need: down payment + closing & legal (6%) + furnishing + delivery maintenance reserve (10% for resort compounds).

Cash Required = Down Payment (Price × Down%) + Closing (Price × 6%) + Furnishing + Delivery Reserve
02

Net Rental Income

Your annual rent after all operating costs. We subtract vacancy, service charges, maintenance, insurance, and property management fees.

Net Income = Gross Rent × (1 − Vacancy%) − Service Charges − Maintenance − Insurance − Management
03

Capital Appreciation

The increase in your property's value over time. Appreciation rates vary by location from 7% (Downtown) to 15% (Sahl Hasheesh).

Future Value = Price × (1 + Appreciation Rate) ^ Years
04

Total ROI

Your total return combines net rental income over the hold period plus capital gain. Expressed as a percentage of your initial cash invested.

Total ROI = [(Net Income × Years) + Capital Gain] ÷ Initial Cash Required × 100
Example

Sample Calculation

A realistic scenario based on a 2BR apartment in Sahl Hasheesh.

Property

Sahl Hasheesh

2BR Apartment · 100 m²

Purchase Price

EGP 5,000,000

With 25% downpayment

Initial Cash Required

Closing & Legal (6%)EGP 1,250,000
Closing & Legal (6%)EGP 300,000
FurnishingEGP 625,000
Delivery Maintenance Reserve (10%)EGP 500,000
Initial Cash RequiredEGP 2,675,000

Annual Operating Costs

Annual Gross RentEGP 576,000
Vacancy Loss (18%)-EGP 103,680
Service Charges-EGP 75,000
Maintenance & Repairs-EGP 50,000
Insurance (0.4%)-EGP 20,000
Property Management (20%)-EGP 115,200
Annual Net Rental IncomeEGP 212,120

Returns

Gross Rental Yield11.5%
Net Rental Yield4.2%
Property Value After 1 YearEGP 5,500,000
Capital Gain (1 Year)EGP 500,000
1-Year Total ROI26.6%
Property Value After 5 YearsEGP 8,052,550
Capital Gain (5 Years)EGP 3,052,550
5-Year Total ROI153.8%
Property Value After 10 YearsEGP 12,968,712
Capital Gain (10 Years)EGP 7,968,712
10-Year Total ROI377.2%

1-Year Total ROI

26.6%

5-Year Total ROI

153.8%

10-Year Total ROI

377.2%

Try It

Calculate Your Own ROI

Use our interactive calculator with real market data from the Red Sea coast. Select a location, unit type, and adjust the parameters to see your projected returns.

Open ROI Calculator