Return on investment (ROI) is a straightforward measure of profitability calculated by dividing the net profit from an investment by the total cost of that investment. In real estate, ROI should account for all income sources (rent, appreciation, tax benefits) and all costs (purchase price, closing costs, renovations, holding costs, selling costs). While simpler than IRR, ROI does not account for the time value of money or the holding period. An investment returning 50% ROI over 10 years is very different from one returning 50% in two years. Investors should use ROI alongside time-sensitive metrics for a complete picture.