Honest Property Investment with Natasha Collins

Return on Capital Employed (ROCE)... what’s the deal?


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Return on capital employed (ROCE) is the % that I hear investors parsing a lot.

This figure is your Net Annual Rent divided by the Cash you put into the deal less any equity you take out of the deal = ROCE as a %.

Nowadays it's common for me to hear 50% or 75% ROCE employed banded about like it's some easy, risk-free thing to be able to achieve.

It’s not.

  • Easy is 10%-20% ROCE.
  • 25% ROCE means you’ll need to make some tweaks to the building.
  • 30% or higher means there’s some risk involved in getting more money out and that risk gets higher, the higher the ROCE.
  • You need to decide what level of risk you are willing to take and whether you are happy to put in the leg work and potentially sleepless nights to achieve that higher ROCE… because remember, it’s tough!

    If you want to find out more about this, listen to today's pod, where I explain what the risks are right now and how you should be investing based on today's economic climate.

    AND...

    You are invited to the NCRE Members' Club LIVE Deal Analysis Masterclass on Thursday the 15th of September (THIS Thursday) at 8pm BST.


    In the 90-minutes...

    ✔ We will analyse TWO current commercial deals that are on the market right now

    ✔ We will walk you through the deal analysis
    ✔ We will explore the pros and cons of each deal
    ✔ We will explain what we would offer and what our maximum price would be
    ✔ You WILL get to ask questions

    Sign up for the Deal Analysis Masterclass here.
    *This is a ONE-time offer, so if you've attended one before, you won't be able to join again.

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    Honest Property Investment with Natasha CollinsBy Natasha Collins

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