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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.


Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

calculator
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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