Property investment calculator is the term used to define an application that provides basic financial analysis that supports the purchase, ownership, management, rental and/or sale of real estate for profit. The Property Investment Calculator is usually driven by the mathematical financial model and converted into source code. Key concepts that drive property investment calculators include returns, cash flow, financing affordability, investment strategy, equity and risk management.
Video Property investment calculator
Calculation
Here are some calculations that can be expected to be viewed from the property investment calculator along with its definition.
- Cash on Cash Return - Your cash flows in the first year are divided by the cash you invested in the property.
- Level of Equity - Increase your equity in the first year of mortgage principal payments divided by the cash you invest in the property.
- Capitalization Rate - Net Operating Income (NOI) divided by the value of your property asset.
- Gross Lease Multiplier - The ratio between the gross income of the rental schedule for the property and its market value.
- Net Cash Flow - The amount of cash you expect to receive after the cost.
- Net Current Value of Future Cash Flow - Your net future cash flows are discounted back to present value using the time value of money to understand what future cash flows are worth today.
- Gross Rental Income The expected total rent income will be accepted.
- Operating Cost - All costs associated with the operation of the property. This can include homeowner insurance, property taxes, and maintenance fees to name a few.
- Net Operating Income (NOI) - Net operating income is also known as net income and your income is received after all operational costs have been deducted. This will exclude income tax and interest.
- Depreciation - The costs associated with depreciating your property. For more information on depreciation, see IRS Publications 946.
- Tax Savings From Depreciation - The amount of taxes saved from depreciation use as a cost to income.
- Debt to Asset Ratio - The ratio of debt remaining on property with property or asset value.
- Internal Rate of Return - Technically, this is the discount rate at which the Net Flow of Future Cash Flow equals $ 0. In layman terms, this is the rate of return that you will receive from your investment in a given year that is adjusted to time value of money.
Maps Property investment calculator
Type of Property Investment Calculator
- House Flipping Calculator
- Rent Property Calculator
History
In response to the 2007 and former US Property Bubble subprime mortgage crisis, a number of residential property investment analysis tools and applications have been launched publicly by governments, commercial organizations and as part of open source projects. This analytical tool has been developed to help real estate investors to understand the risks and returns on residential property investment. These tools include mortgage calculators, residential property depreciation calculators and property investment calculators. A number of web technology companies have also developed a comprehensive all-in-one package that provides financing, risk and return analysis, investment strategy and portfolio management capabilities.
References
See also
- Capitalization rate
- Cash on cash return
- Creative Real Estate Investment
- Real-estate developers
- Off plan property
- Internal rate of return
- Investment Rating for Real Estate
- Flip
- Wholesale
- Rental Property Calculator (Property Rental Analysis Software)
Source of the article : Wikipedia
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