All
Here is a rate of return calculator for figuring rental property that I use.
The yellow cells are for you to change data.
The loan calculator at the bottom automatically figures the morgage for you.
You will have to add the taxes and insurance.
In the 1st attachment the property is pretty close to breakeven, with lost rent and maintance figured in.
In the 2nd attachment I raised the rent.
To use the calculator you will enter your loan, improvements, interest rate and years and the costs of the property (taxes, garbage).
You can play with the variables (purchase price, improvements, interest rate # of years) to see if the deal will work for you.
You should be able to copy and paste this into a blank excel sheet.
Edit Sorry I attached the 1st attachment twice.
Rich
Edited 6/21/2008 11:14 am ET by cargin
Replies
I didn't see any number in there for property management or reserves or vacancies.
Bob's next test date: 12/10/07
Jim
I am not as sophisticated as you.
On a small scale I manage my own properties.
Vacancies are covered under lost rent.
You can always add a line for the costs that you incurr in your operation.
Rich
C'mon Jim
Least you could say would be " That is pretty neat how you intergrated a loan amortization chart into your ROR worksheet. I would have to figure in property management fees into my ROR worksheet."
Rich
Sorry, I really didn't plug any money into it to check it out LOL. I've had those types of programs for many years but since I'm not in the landlord business I really have not had any use for them. I didn't intend to slight your effort sorry! But, I was alarmed when I don't see the expense column filled up with real world expenses. Newbies to the business will never recoup these expenses if they don't know about them. If you factor them in, there is a chance that you will get paid for them. This concept is very similar to telling remodelers that they have to factor their labor burden properly. Bob's next test date: 12/10/07
I dont really do it either .
I just say 200 per unit over per month which is 2400 per year.
Take all real costs , and add the 200. If its not there we dont dance . I wont do a deal for less on a rental. I will put up say 5 grand to buy and fix it and forgive it . Not forget but forgive .
Because you have to figgure whats real. Then you have to calulate what history has been if the future looks pleasing . Its all you can do really because business is always some sort of gamble or everyone would be rich.
Lets take one deal Ive had to explain it .
15 years ago I bought a 3bd 1 bath brick home at auction for 32,000. I rented it for 450.00 per month which didnt give me the 200 over. However the home was worth 46,500. The house is now worth 75,000. Its paid for and I own it .
If I did a sheet on it which I have not I would have to show all the money I recieved for rent over expenses. Its a lot more than Ive spent . I know that . Insurance roofed and painted it . I replaced the outside unit and the furnace for around 3,000. I carpeted it twice for around 1400 for both times . Deposits paid for the inside repairs. 100 per month on it for repairs total around 18,000 over 15yrs.
The real deal of the whole thing is it went from 46,000 to 75,000 since Ive owned it and the renters paid off the 32,000 note on it . Ive still got 5 grand invested in it that I forgave a long time ago. Maintence is well over paid but it doesnt really matter over the long haul as its the smallest number to consider. A banker told me a long time ago on rentals he had it was ok if he broke even on repairs not counting his time . It took a long time to figgure that out for me and I was worried about it for a long time till I did a spread sheet . Its very minimal like the 5 grand I have forgiven.
I carried 8 rentals most of that time doing the same thing more or less . Other than finding time you dont really worry about getting paid because you know you are many times over.
Tim
Edited 6/21/2008 4:51 pm by Mooney
Tim I agree I have 7 rental houses now . Some bring in more monthly income(Positive Cash ) than others . I have one duplex thats more profitable per month but doesnt apprecieate as much as the other in a better school district . I paid 168 for the better district house and its worth 200 now in 4 yrs the other house I paid 82500 and redid it inside it was 1/2 done when I bought it I put in about 35000 it grosses 2400 a month I have no mtg on that one its a cash cow but it doesnt apprecieate as much as the other . I think I prefer cheap houses that cashflow well . I prefer income vs long term apprecieation
either way its a win win depends on what your intentions are
I love finding good deals on property and rehabbing them and getting them to cash flow
there isnt a better ting than that . Well almost
Royal
What box do you check when the renter is about to move out, has a large drug party and they decide to start a campfire on the livingroom floor? (true story) :-)
renting to college age boys must be the worst
Beer was created so carpenters wouldn't rule the world.
Shhh... Some things the statute of limitations may not have run out on yet. ;-)
They can't get your Goat if you don't tell them where it is hidden.
Don
Check this box "Mama told me not to buy it."
Should have put my downpayment into mutual funds.
Forget all this wealth building nonsense and just go back to work.
Rich
college age girls are worse from what I've seen
some may call us crazy but we get $2100/ Month rent on a 4 BR 2 BA 1440 SF place. They way I see it someone else is making my mortgage.
True It's nearly a break even deal for us. we have a nice family in there and hope to offer it to them in a few years to purchase. No college parties or campfires so far.ML