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July 20, 2007 at 2:34 PM #66812
surveyor
Participant

here you go:

ROE = (CF + AP + LR + TX)/DP

ROE-return on equity/investment
CF-cash flow
AP-appreciation
LR-loan reduction
TX-tax benefit
DP-downpayment

You can use this formula to evaluate the better return between properties or to choose superior returning properties. In general, anything about ROE greater or equal to 20% is good.