Principal Reduction Benefit Worksheet

This is the Principal Reduction Benefit example using the Investment Property Calculator for a real estate rental investment property. The light green highlighted areas correspond to the scenario given in the example on the Income Benefit of Real Estate Investment page and the Principal Reduction Benefit Example Worksheet page.

Investment Property Analysis Worksheet

This worksheet will assist in estimating the first year benefits of a real estate investment property. It does not consider any future actions such as selling or exchanging. Always seek competent legal and tax advice before purchasing investment property. This worksheet is for informational purposes only.

Purchase Cost $165,000
Cash Investment $33,000
Financing Amount Rate P&I
$132,000 7.00% $878.20
Land Value $0
Personal Property Value $0
Building Value $0
Land Improvement Value $0
Total Depreciation $0 $0
Annual Rent Less Vacancy GOI
$18,000 $1,500 $16,500
Annual Operating Expenses
Real Estate Tax Repairs Association Dues Management Misc. Lawn
$2,000 $1,075 $0 $0 $750
Insurance Utilities Advertising Supplies Misc. Pest
$900 $0 $0 $0 $250
Total Operating Expenses $4,975
I. GOI $16,500
Less Operating Expenses $4,975
= NOI $986.60
Less Annual Debt Service $878.20 x 12 = $10,538.40
= CFBT (Income) $986.60
II. Annual Debt Service $10,538.40
Less Interest $9,197.52
= Principal Reduction $1,340.88
III. NOI
Less Interest
Less Total Depreciation
= Taxable Income
Times Tax Bracket 35%
= Taxes Paid $0.00
IV. Appreciation

Return on Investment with Appreciation

CFBT + Principal reduction + tax saved + Appreciation/Cash Invested

 $0.00

Return on Investment without Appreciation

CFBT + Principal reduction + tax saved/Cash Invested

 $0.00

Capitalization rate

NOI/Purchase cost

 $0.00

Cash on Cash

CFBT/cash invested

 $0.00

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