Investment Property Calculator
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Investment Property Calculator

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Investment Property Calculator

An investment in property can be an excellent investment.  This calculator is designed to examine the potential return you might receive from an investment property.

Please refer to the 'Definitions' directly below the calculator area to help you understand each section of the calculator.

Investment Property Calculator Definitions

  • Cash Invested|
    The cash amount out of pocket required for the purchase of this property.
     
  • Interest Rate
    The amount of interest the investor pays annually to borrow money from the lender. Rates and programs can vary, check with lender for more information.
     
  • Land Value
    The approximate value of the land that the property sits on. Usually available on the tax records in the county the property resides. You can not depreciate land value.
     
  • Personal Property
    Anything that you have that is used for the investment property, such as washer/dryer, range, refrigerator lawn equipment, fixtures and other.
     
  • Personal Property Depreciation Rate
    The rate annually you can depreciate on the personal property.
     
  • Building Value Depreciation Rate
    Recovery period for five-year personal property. Year 1/20%, Year 2/32%, Year 3/14.20%, Year 4/11.52, Year 5/11.52%, Year 6/5.76%
     
  • Appreciation
    The amount the property is appreciating on an annual basis. Appreciation occurs on entire value of the property.
     
  • Loan P&I
    P=principle, I=interest
     
  • Total Depreciation
    Total amount you can depreciate annually on personal property and building value.
     
  • Gross Operating Income
    The amount of income available after vacancy.
     
  • Total Annual Operating Expense
    The total annual expenses including real estate tax, repairs, management fees, insurance, utilities, supplies, and other miscellaneous expenses.
     
  • Operating Expense Ratio
    It's the percentage amount- based on the income 23 - 30% is considered average
     
  • Net Operating Expenses
    Total annual amount of expenses.
     
  • Cash Flow Before Tax
    What's left after expenses, principle payment and interest.
     
  • Annual Debt Service
    Your payment to lender including principal and interest.
     
  • Return on Investment With Appreciation
    Cash flow before tax + principle reduction + taxes saved/paid + appreciation divided by cash invested. Includes appreciation.
     
  • Return on Investment Without Appreciation
    Cash flow before tax + principle reduction + taxes saved/paid divided by cash invested.
     
  • Cap Rate
    Net operating income divided by price, capitalization rate, rate of return. Over 10% is considered an excellent rate.
     
  • Cash on Cash
    Cash flow before tax % cash invested.

Calculator Disclaimer

The Calculator Planning Tools are provided to you for illustrative purposes and are not guaranteed or intended to provide advice. The calculations you perform are based on the information you enter and should be used only as guidelines. The calculations do not represent terms or interest rates available from First Bank or whether you qualify for an account or loan. For more information please see our full Terms of Use or Contact Us if you have questions.