What Is a Good ROI? Benchmarks by Industry (2026)
August 22, 2026 · 5 min read
ROI (Return on Investment) is one of the most widely used metrics in business and investing. But "good" is relative — a 5% ROI might be excellent in one context and terrible in another. Here's how to evaluate your returns against realistic benchmarks.
The ROI Formula
ROI = ((Final Value − Initial Investment) ÷ Initial Investment) × 100. For example, if you invest $10,000 and get back $13,000, your ROI is (3,000 ÷ 10,000) × 100 = 30%.
Industry Benchmarks
| Investment Type | Typical Annual ROI | Notes |
|---|---|---|
| S&P 500 (stocks) | ~10% | Historical average since 1926, before inflation |
| Real estate (rental) | 8-12% | Includes appreciation + rental income |
| Real estate (REITs) | 10-12% | Publicly traded, more liquid |
| Bonds (US Treasury) | 3-5% | Low risk, lower return |
| Small business | 15-30% | Higher risk, highly variable |
| Digital marketing | 200-500% | Per campaign, not annual |
| Savings account | 4-5% | Risk-free, current high-rate environment |
| Crypto | Highly variable | Extreme volatility, speculative |
Context Matters
Risk vs. return: A "good" ROI always accounts for risk. A 5% return from a government bond is considered good because the risk is near zero. A 5% return from a startup would be poor because the risk of total loss is high.
Time horizon: A 50% ROI over 10 years is different from a 50% ROI over 1 year. Use annualized ROI (CAGR) to compare investments of different durations fairly.
Inflation: A 7% nominal ROI with 3% inflation means your real return is only about 4%. Always consider whether your returns are beating inflation.
Common ROI Mistakes
Ignoring costs: Marketing ROI calculations often forget labor costs, tools, and time spent. Always include all costs to get the true picture.
Cherry-picking periods: Stocks returned 30%+ in some years and lost 40% in others. Use at least 5-10 year averages for meaningful benchmarks.
Comparing unlike things: A real estate ROI that includes leverage (mortgage) is not directly comparable to a stock ROI without leverage. Normalize before comparing.
Calculate Your ROI
Use our free ROI Calculator to compute your return on investment, including annualized CAGR for multi-year investments.
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