Rate of Return (ROI) on Investment - Real Estate Apartments

I have  been recently contacted by a reader asking for a help to analyze results of investing into 2 condominiums (apartments).

Here is the input data (story):

Apartment #1  (Apt. #1) - initial investment $ 56 K back in 2005 and additional amount of money in 2010 - $170 K.

Apartment #2 (Apt. #2) - investment $ 170 K in 2010.

The questions are:

 - Whether the investment in the real estate worth it and what is rate of return (ROI)? 

 - What to do next - sell them or keep as rental properties?

Rate of Return (ROI) vs. Inflation

I set my goal back in 2010 that I would need $2 million to become a financially independent person. This means that I have enough capital to generate income which should cover my expenses.

I looked at the role of the inflation on my portfolio. Since the 2010 Cumulative inflation over 3 years is 9%.  In practical terms  it converts $100 in 2010 worth less than $92 today.  If current inflation rate will stay the same by 2040 the same $100 would worth only $48.

I reported that my portfolio worth $226,800 but in 2010 money it is $209,000. This underlines importance why  rate of return on your investments should be at least 2-3% above inflation rate.

2013 Financial Independence Goals

Financial:

- Accumulate at least $42,000 for investments during 2013, beginning  2014.

- Continue to diversify the nest egg.

- Think about additional source of income.

Blog:

- Regular monthly updates

- To cover  6 themes

I have no intentions to move towards an entertaining blog with 2-3 weekly posts.   I will endeavor my best efforts to stay on personal subject of financial independence and family budget.  

Educational:

-  Create list of books to read  & read them- 12 books is minimum.

-  Publish the books reviews.

Family Budget:

- Stay under $80,000 with the family expenses

- Accumulate $7,000 towards durable goods replacement over 10 years.

Be happy.  Run 1,000 miles during the year.