This is the Return on Investment example using the Investment Property Calculator for a real estate rental investment property. The orange highlighted percentages correspond to the scenario given in the example on the Return on Investment in Real Estate Investment 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 | $25,000 | $0 | ||
| Personal Property Value | $3,400 | $680 | ||
| Building Value | $135,600 | $4,719 | ||
| Land Improvement Value | $1,000 | $50 | ||
| Total Depreciation | $165,000 | $5,450 | ||
| 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 | $11,525 | |||
| Less Interest | $9,197.52 | |||
| Less Total Depreciation | $5,450 | |||
| = Taxable Income | -$3,122.52 | |||
| Times Tax Bracket | 35% | 35% | ||
| = Taxes Paid | -$1,092.88 | |||
| IV. Appreciation | $0 | |||
Return on Investment with AppreciationCFBT + Principal reduction + tax saved + Appreciation/Cash Invested |
10.36% | |||
Return on Investment without AppreciationCFBT + Principal reduction + tax saved/Cash Invested |
10.36% | |||
Capitalization rateNOI/Purchase cost |
6.98% | |||
Cash on CashCFBT/cash invested |
2.99% | |||
