Rental Property Calculator
Watch this video walkthrough of the Rental Property Calculator ➤
Ditch the spreadsheets! Investors save up to 4 hours each time they use our simplified rental property calculator.
- Determine the profitability of a potential rental property
- Estimate potential monthly and annual cash flow
- Create printable PDFs to show lenders or partners
- Calculate return on investment over time
- Plan for unforeseen expenses
At Homeportfolio, we understand investing in a rental property is a big, important decision. There are a lot of factors that go into deciding if a rental property is the right real estate deal for you. With the Homeportfolio Rental Property Calculator, our users can determine how the property would cash flow—the optimal way to help users assess if the property is the right addition to a real estate portfolio.
If you are new to real estate investing and aren’t sure what to consider when choosing a rental property, we encourage you to read the information below.
How To Use the Rental Property Calculator
Using the Homeportfolio Rental Property Calculator is a straightforward process that allows you to analyze any rental property deal with precision. To make the most of this tool, youll need specific information about the property and your financial situation.
Heres what you need and how to use the calculator effectively:
- Property Information: Enter the propertys address, purchase price, and estimated closing costs. You can find this information on listing sites, through your investor-friendly real estate agent, or directly from the seller.
- Loan Details: Specify your down payment percentage, interest rate, loan term (e.g., 30 years), and whether youre paying points on the loan. These details determine your financing terms. An investor-friendly lender can help you get the best funding for your strategy.
- Income: Enter the estimated monthly rental income. You can gather this information from rental listing sites, local market knowledge, or Homeportfolio Insights (if you have access).
- Expenses: Include all relevant expenses, such as property taxes, insurance, utilities (if youre responsible), repairs and maintenance, capital expenditures, property management fees (if applicable), HOA fees (if applicable), garbage, sewer, and vacancy rate.
- Analysis: Once youve input all the necessary data, the calculator generates a comprehensive report. Youll find details about your annualized return, cash flow, cash-on-cash return, cap rate, and more. These metrics help you assess the profitability of the deal.
- Fine-Tuning: Feel free to adjust your assumptions and see how they impact the results. For instance, you can experiment with different rent values, vacancy rates, or financing options to evaluate various scenarios.
- Sharing: You can enable report sharing and even download your analysis as a PDF, making it easy to share with potential partners, lenders, or advisors.
Remember, what constitutes a good deal can vary depending on your unique circumstances and investment strategy. The Homeportfolio calculator empowers you to make informed decisions tailored to your goals, whether maximizing cash flow, seeking appreciation, or a balanced approach.
Utilize this tool to analyze properties effectively, and remember that ongoing market research and due diligence are key to successful real estate investing. With the Homeportfolio Rental Property Calculator, you can confidently evaluate potential investments and make decisions that align with your real estate investment objectives.
What’s a Good ROI for a Rental Property?
When evaluating a potential rental property investment using a rental calculator, one key metric to consider is the Return on Investment (ROI). ROI is a critical indicator of how well your investment performs and whether it aligns with your financial goals. But what exactly constitutes a good ROI for a rental property?
The answer isnt one-size-fits-all. The ideal ROI can vary depending on factors like location, property type, risk tolerance, and overall investment objectives. Generally, a good ROI for a rental property should exceed your initial expectations and provide a competitive return compared to alternative investments. In real estate, a commonly accepted benchmark is an ROI of at least 8% to 12%, although many successful investors aim for higher figures to maximise their wealth-building potential.
Ultimately, the definition of a good ROI is unique to your individual investment strategy and objectives, making it crucial to consider your financial circumstances and risk tolerance when assessing a rental propertys performance.
Other Helpful Calculators
If you are looking into other types of real estate investments and aren’t considering a buy and hold property,
then you might find the following calculators helpful in your real estate investing journey: