This rental property calculator can give you enough insights into your investments in rentals. You not only get the details of years of investment i.e. the time period for which you plan to hold the property, but also a representation of your income and expense. There is a lot more than you can be able to find out about your rental property with this rental property calculator.
Rental property investments are the real estate investments that involve buying a real estate property and then holding it, leasing it for generating an income and then selling it at a profit. It is normally believed that rental properties generate passive income but there's nothing passive about it. This is, especially, so when you don't have any management consultant for taking care of the administrative work. Those who have experienced it in the real life consider it really exhaustive whether it is about filing the paperwork or handling terrible tenants.
In order to earn better returns, it is common for investors to buy cheap properties and then make some improvements before leasing them out. However, older properties usually have higher repair and maintenance costs associated with them. These investments usually tend to be cashflow dependent and capital-intensive with lower liquidity levels. However, when compared to equity markets, these investments tend to be more stable and come with tax benefits.
However, if there is appropriate financial analysis involved in your decision making process, these properties can turn out to be quite worthwhile and profitable investments.
The rental property calculator here is a bit more complex as compared to other calculators that you can find on this site. The calculator requires you to provide four major sets of information including Purchase, Income, Recurring Operating Expenses, and Sell.
In the Purchase section, you are required to enter information related to your property's purchase. This includes, purchase price, down payment, interest rate, loan term (if you had used the loan), closing costs, repair cost and repair value (in case if your house needed repairs).
Then there is income section. In this section, you have to specify the monthly rent, vacancy rate, management fee, annual increase in the rent price and any other monthly income that you may have.
In recurring expenses section you must enter information like property tax, total insurance, HOA fee, maintenance and any other costs that you have to bear time and again.
Finally, in the sell section, you have to enter value appreciation, holding length, and the cost to sell. Once you have entered all these values, hit the calculate button on the rental property calculator to perform the calculations and the results will be shown instantly.
The rental property calculator basically shows three different tables according to the information presented by you. The first one tells you different indicators for the period until you want to hold the property. These values include Return percentage, Total Profit you'll make when selling the property, percentage for Cash on Cash Return, Capitalization Rate, Total Rental Income, Total Mortgage Payments, Total Expenses and Total Net Operating Income.
The second table shows you information on your first year's income and expenses. This includes your Income, Mortgage Payment, Vacancy at your specified rate, Property Tax, Maintenance Costs, Total Insurance, Cash Flow, any other costs and Net Operating Income for the year. Both monthly and annual values are show for all these heads in the table.
The last table shows a complete schedule of what you are getting and what is going out during the time period you hold this rental property. The yearly values include annual income, mortgage payments, expenses, cash flow and cash on cash return.
So, this rental property calculator gives you quite a lot of information related to your investment in a rental property. It can really prove to be helpful in planning the purchase, keeping the property, and then finally selling it at a profit. Besides, you can also find out which investment will be more lucrative than the others.