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Basics Of Real Estate Investment

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There are tons of reasons why one should invest in real estate in Ethiopia. One of the main reasons is that real estate in Addis Ababa has high profitability and return on investment due to the high demand for housing in the city’s capital. Especially when you are working with a company like Metropolitan Real Estate that believes in building the best home and delivering it on time, your investment is for sure worthwhile. In the next few weeks, we will walk you through the benefits of investing in Metropolitan Real Estate. But for today, let me give you some information about real estate investment.

Here are some of the terms you should know about Real estate investment.

Commercial Real Estate

Commercial real estate is defined in opposition to residential real estate. The definition of commercial properties encompasses industrial properties, medical facilities, office buildings, retail centers. It can also refer to land that will be developed into a commercial project in the future.

Residential Real Estate

Residential real estate includes both new construction and resale homes. The most common category is single-family homes. There are also condominiums, co-ops, townhouses, duplexes, triple-deckers, quadplexes, high-value homes, and vacation homes. Here’s more on residential real estate.


Appreciation refers to the increase in the value of a property over time. Appreciation is raised by several things, including inflation, an increase in demand, or a decrease in the supply of properties. It can also take into, account added value as a result of property improvements (such as upgrading a kitchen, adding a room Appreciation) is usually projected as a percentage of the property’s value over a year.

Return on Investment

Return on investment (ROI) stands for the calculated benefit of an investment (called the return), divided by its cost. Your ROI is impacted by several variables such as renovation and maintenance costs, and how much you originally borrowed to invest in your property.

Internal Rate of Return (IRR)

The IRR of an investment is the point at which the net value of investment expenses equals the net value of asset income. These are both calculated at the current value of the investment. Not the purchased or future value of the property.

The internal rate indicates at what point an investment could be considered profitable.

Cash Flow

It is the net operating income minus the total of all debt service payments.

We hope this helped give you some idea of the most common real estate investment terms.

Metropolitan real estate PLC, is an American-owned Real estate building, building quality homes in Ethiopia to fulfill the needs of luxury real estate for sale in Addis Ababa and all of Ethiopia.

Let us connect today, on Metropolitan Real estate, which has multiple ongoing projects such as Metropolitan Central Tower Luxury Apartments are around AU headquarters. Metropolitan Westview Standard Apartments located at Total Soset kuter Mazoriya. If you are ready to begin your journey on the way to becoming a homeowner, please contact us with the Ethiopian office: +251973404040 and USA office: +1480 280 2242.


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