What is the After-Tax Rate in Real Estate Investing?

In real estate investing, the after-tax rate is a property investment’s rate of return after applicable taxes have been paid. The after-tax rate is based on the after-tax income divided by the investor’s equity.

For example, William has invested $1,000,000 to buy an apartment building. When he eventually sells it for $1.5 million and pays capital gains, he nets $200,000 in after-tax profits.

His after-tax rate of return would be 20% ($200,000 divided by $1,000,000).

For more information, see also the following entries:

• :Apartment:
• :Capital Gain:
• :Capital Gain Tax:
• :Commercial Real Estate:
• :Equity:
• :Income Tax:
• :Investment Property:
• :Operating Expenses:
• :Operating Income:
• :Rate of Return:
• :Real Estate:
• :Real Property:
• :Return on Investment: