Analyze the Potential Profit or Loss of your Real Estate Investment
Enter your numbers in the
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Some of the columns may show ###### when dealing with a high value property (over $1m.) Just divide your entries by 1,000, making the results easier to read.
Purchase Price:
Down Payment:
Interest Rate on Loan:
% p.a.
Term of Loan:
yrs.
Improvement Ratio:
% age of building to total property value
No. Yrs. of Depreciation:
yrs. Straightline for residential. 39.5 years for commercial.
Number of units and rent each
1 bed room
If single family home just
2 bedroom
put 0s in fields as appropriate
3 bedroom
4 bedroom
Scheduled Annual Gross Income:
Vacancy/Collection losses:
%
(Annual Operating Expenses)
---------
Property taxes :
Insurance:
Flood in
surance
Management:
% of income
Repairs/Maintenance:
% of income
Electricity:
Gas:
Oil:
Water:
Trash Collection:
Advertising:
Telephone:
Other:
Replace "Other"
Other:
with name of Other
Other:
Expenses
Annual Increase of Income:
% p.a.
Annual Increase of Expenses:
% p.a.
Annual Increase in Property Value:
% p.a.
Investor's Tax Bracket:
%
Capital Gain Tax Rate:
% This varies depending on the tax payer.
CGT Rate on Recaptured Depreciation
%
Immediate Capital Improvements:
Approx. Buying Costs:
% of total
Approx. Sales Costs:
% of total
Value of Property After Capital. Imp.
(Best estimate)
PURCHASE SUMMARY
LOAN
DEPRECIATION
Price
Interest %
Land
Dn. Pymt.
No. Yrs.
Improvemen
t
Loan Amt.
Mo. P & I
No. Yrs.
Buy Costs
Yr. P & I
Yr. Depr.
Cap Impr.
Val of Prop
Yr.1
Yr. 2
Yr. 3
Yr. 4
Yr. 5
Yr. 6
Yr. 7
Yr. 8
Yr. 9
Yr. 10
ANNUAL OPERATING INCOME
Expected Gross Income
less Vacancy/Collection lo
sses
EFFECTIVE GROSS INCOME (EGI)
ANNUAL OPERATING EXPENSES
TOTAL OPERATING EXPENSES
NET OPERATING INCOME
CAP RATE Per Year (NOI/Initial Invest)
CASH FLOW (BEFORE TAXES)
Net Operating Income
-Yrly. P & I
CASH FLOW (BEFORE TAXES)
TAX BENEFIT
Net Operating Income
-Annual Interest
-Annual Depreciation
Taxable Income
INCOME TAX Due
Note that when the property loses money you get a reduction in your income tax for the loss. When it makes money you will pay tax on your profit.
If the tax due is negative, as often happens in first few years, you get a tax credit. This is subject to passive loss rules, see your tax advisor.
ESTIMATED SALE PROCEEDS (AFTER EXPENSES & TAXES)
Yr. 1
Yr. 2
Yr. 3
Yr. 4
Yr. 5
Yr. 6
Yr. 7
Yr. 8
Yr. 9
Yr. 10
ADJUSTED COST BASIS
Original Basis
+ Capital Improvements`
+ Sales Costs
- Accum. Depreciation
= ADJUSTED COST BASIS
True CAPITAL GAIN
Sales Price
Non adjusted cost
True Gain or loss
CAPITAL GAIN for tax purposes
Sales Price
- Adjusted Cost Basis
CAPITAL GAIN (tax purposes)
LONG TERM CAPITAL GAIN TAX (must hold asset for more than 1 year)
Capital Gain for tax purposes
= Tax on Capital Gain
EST. NET SALE PROCEEDS (after tax)
Sales Price
- Sales Costs
- Ending Loan Balance
= Proceeds Before Taxes
- Capital Gain Tax
= EST NET SALE PROCEEDS A/T
Cash invested by owner
Net cash to owner on sale (less cash inv)
(In later years one should allow for loss of interest on the cash one invested)
Net Operating Income less Interest for yr.
Income tax for the year
(if positive this is a tax credit)
NOI -Interest + Tax credit (or - tax paid) for
yr.
Cumulative after tax income (excd. Depr)
(This assumes you have other taxable income to set any tax credits against)
If you hold till the end of the 10th yr then sell, you have a capital return on your investment, after tax:
and have also earned a total after tax income of:
Thus on an original cash
investment of:
you have an approx. annualized return of
This report is based on certain assumptions.The projections are estimates only. Anyone using or relying on this report is advised to seek
competent legal, financial, and/or tax advice.
This calculator is copyright of Mortgage-Investments.com
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