Return on Assets (ROA)

Return on assets measures how much income a business earns relative to its total assets. For a single rental property, the closest match is NOI divided by the property's value, which is its cap rate. It shows what the asset earns before financing decides how that income is split.

On the default house, NOI of $28,892 against a $500,000 value is about 5.8%. Measured against a market value of about $444,500, it is 6.5%. The ratio rises as NOI grows or value falls.

Corporate ROA uses net income, which is after interest and taxes, so it runs lower than a property's NOI-based figure. When comparing a real estate company's ROA to a property's cap rate, keep in mind that the two use different measures of income.