Rate of return analysis

You should not include principal repayment when calculating rate of return because that money is being paid out of the money that was given to you by the lender. If you could pay the lender a tiny slice of the building each month instead of principal repay, then at the end of the loan your building would be completely gone. But you would have had a much better cashflow for all of the years of the loan. So consider principal repay the equivalent of giving back a little of the building each month, but since you can't actually do that, you have to pay money. But that money should not be included in expenses because you are getting to keep a tiny slice of the building each month that was not yours before.