Return on Equity Quadrant™

The Return on Equity Quadrant™ is the amount, in dollars, of each of the four primary returns in a real estate investment divided by the current equity in the property.

The four primary areas of return are:

  • Appreciation
  • Cash Flow
  • Cash Flow from Depreciation
  • Debt Paydown

We typically display this graphically as:

Return on Equity Quadrant™
Return on Equity Quadrant™

If we divide the amount of the return in dollars by the initial investment (instead of the total equity) for each quadrant, we get the Return on Investment Quadrant™.

You can see the Return on Equity Quadrant™ on The World's Greatest Real Estate Deal Analysis Spreadsheet™ along with the Return on Investment Quadrant™.

I discuss the Return on Investment Quadrant™ and Return on Equity Quadrant™ in detail in the book How to Achieve Financial Independence and Live Your Passion Regardless of Age or Income as well as several classes I've taught.

>