When determining ROI, what is considered the 'Initial Cash Investment'?

The concept of 'Initial Cash Investment' in the context of Return on Investment (ROI) typically includes all the cash that an investor contributes to acquire a property before any financing is taken into account. This encompasses the complete financial commitment made at the outset of the investment.

The total cost of the property represents not just the purchase price but also accounts for additional expenses such as closing costs, inspections, and any other immediate costs associated with acquiring the property. By using the total cost as the basis for the initial investment, this calculation reflects the complete financial obligation the investor must cover to secure ownership.

In contrast, other options such as the down payment only consider a part of the initial investment. The purchase price minus debt does not accurately represent the cash spent, as it does not account for additional expenses. Finally, while the down payment plus closing costs might seem comprehensive, it may still omit other potential costs associated with acquiring the property. Thus, the total cost of the property provides a clearer and more comprehensive view of the investment upfront, making it the appropriate choice for determining the initial cash investment in ROI calculations.