Calculate annual return, total REIT investment amount, or return on REIT percentage from any two values in this simple investment calculator.
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Return on REIT Formula
The main formula for return on REIT measures the annual dollar return as a percentage of the total amount invested in the REIT.
Rearranged formulas used by the calculator:
- Return on REIT is the annual return percentage from the REIT investment.
- Annual Return is the dollar amount earned from the REIT over one year.
- Total REIT Investment Amount is the total dollar amount invested in the REIT.
If you enter annual return and total investment, the calculator finds the return on REIT percentage. If you enter return on REIT and total investment, it finds the annual dollar return. If you enter annual return and return on REIT, it finds the investment amount needed to produce that return.
Common REIT Return Ranges
Actual REIT returns vary by property type, interest rates, management, debt levels, occupancy, and market price changes. The table below gives general interpretation ranges for annual return on REIT investments.
| Annual Return on REIT | General Interpretation | What to Check |
|---|---|---|
| Below 3% | Low annual return | Dividend yield, price decline, fees, or short holding period |
| 3% to 6% | Moderate return range | Dividend consistency and property sector performance |
| 6% to 10% | Strong annual return | Whether the return is from income, price growth, or both |
| Above 10% | High return, often with higher risk | Leverage, payout ratio, sector risk, and sustainability |
Example Calculations
Example 1: Calculate return on REIT
You invested $20,000 in a REIT and earned $1,400 over one year.
The annual return on the REIT is 7%.
Example 2: Calculate annual return
You invested $35,000 in a REIT with an annual return on REIT of 5.5%.
The annual return is $1,925.
FAQ
What should count as annual return for a REIT?
Annual return can include dividends received during the year plus any change in the value of the REIT position if you are measuring total return. If you only want income return, use dividends only. Be consistent with the method you choose, especially when comparing multiple REITs.
Is return on REIT the same as dividend yield?
No. Dividend yield only measures dividend income relative to price or investment amount. Return on REIT can include both dividends and capital gains or losses. For example, a REIT may have a 5% dividend yield but a total return of 2% if the share price falls during the year.
Can return on REIT be negative?
Yes. If losses are larger than income, the annual return can be negative. For example, if you receive $800 in dividends but the REIT value drops by $1,500, your total annual return is negative $700.
