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Investment Property Calculator
An investment property can be an excellent investment. This calculator is designed to examine the potential return you might receive from an investment property.
Definitions
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definition
Cash Invested
The money, you the investor, actually have to put down on the property. (out of pocket). Usually it is the amount of earnest money you invest in property.
Interest Rate
The amount of interest the investor pays annually to borrow money from the lender. Rates and programs can vary, check with lender for more information.
Land Value
The approximate value of the land that the property sits on. Usually available on the tax records in the county the property resides. You can not deprecate land value.
Personal Property
Anything that you have that is used for the investment property, such as washer/dryer, range, refrigerator lawn equipment, fixtures and other.
Personal Property Depreciation Rate
The rate annually you can depreciate on the personal property.
Building Value Depreciation Rate
Recovery period for five-year personal property.
| Year | Percentage |
|---|---|
| 1 | 20% |
| 3 | 14.20% |
| 5 | 11.52% |
| 2 | 32% |
| 4 | 11.52% |
| 6 | 5.76% |
Appreciation
The amount the property is on an annual basis appreciation occurs on entire value of the property
Loan P & I
P=principle, I=interest
Total Depreciation
Total amount you can depreciate annually on personal property and building value.
Gross Operating Income
The amount of income available after vacancy.
Total Annual Operating Expense
The total annual expenses including real estate tax, repairs, management fees, insurance, utilities, supplies, and other miscellaneous expenses.
Operating Expense Ratio
It's the percentage amount- based on the income 23 - 30% is considered average.
Net Operating Expenses
Total annual amount of expenses.
Cash Flow Before Tax
What's left after expenses, principle payment and interest.
Annual Debt Service
Your payment to lender including principal and interest.
Equal Principle Reduction
The amount left annually as you pay down the principle and interest.
Return on Investment w/appreciation
Cash flow before tax + principle reduction + taxes saved/paid + appreciation divided by cash invested. Includes appreciation.
Return on Investment w/ out Appreciation
Does include same formula above except appreciation.
Cap Rate
AKA= Net operating income divided by price, capitalization rate, rate of return- Anything in Double Digits is Fantastic!
Cash on Cash
Cash flow before tax % cash invested.
Investment Appreciation
Annual Percentage of increase of appreciation of property.
Total Return
The total analyzation of returns of the property.
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