You can adjust this value up or down if you know what your management costs will be. We used 12% as our default rate because we assume you could find a property manager that charges 10% with some leasing fees as well. Many companies charge 10% of the rents for property management, some charge 12%, and some charge leasing fees as well. Property management fees also vary by region and town. Remember if you have a house vacant for a month, you also have to pay utilities for that month as well as missing rent payments.įor multifamily properties, I increased the percentage for vacancies because they typically have higher turnover than single-family homes. Your vacancy amount can be much higher than this if you invest in an area with a lot of turnover. A basic figure to use is 10% of the monthly rent as vacancies. Vacancies are hard to figure because every area has a different rental market. The newer the home, the less maintenance needed. The custom maintenance table couples the condition of the home with the age of the property to give you a percentage of the monthly rent to use for maintenance. Newly remodeled means the home has been recently built or almost everything has been replaced and redone in the last year or two. Some updating would mean the home has mostly new systems, but might not be completely remodeled and has some aging systems. An average condition would mean the house is in decent shape, but may not have been updated for ten years and has aging systems like hot water heaters or a furnace. I figure any home that is going to be rented should be in average condition or better. I created three property condition categories newly updated, some updating and average. I tried to account for maintenance costs by creating a table with different percentages of maintenance needed based on the age and condition of a home. The older the home, the more likely it is that there will be more maintenance needed. Some properties are newer, some are older, some are remodeled and some aren’t. It can be difficult to account for maintenance when calculating cash flow because all properties are different. To get an accurate idea of cash flow you need to consider maintenance, vacancies and property management if you are not going to manage the homes yourself. There is much more to consider than just mortgage payments, taxes, and insurance. This calculator accounts for the expenses you will encounter when owning a rental property. If you have plenty of cash flow, then you can survive a drop in prices and appreciation is a bonus. Appreciation is nice, but you can’t count on appreciation. I am a strong believer that cash flow is the most important part of investing in long-term rental properties. If you are looking for a more in-depth calculator, check out my review on Rehab Valuator. We also have a 1031 Exchange calculator that lets you know how much in taxes you will save by doing a 1031 exchange: 1031 exchange calculator. We have a CAP rate calculator here: Cap Rate Calculator. I have a fix and flip and calculator here: Fix and flip calculator. If you are thinking of flipping houses, the 70 percent rule can help you decide how much to pay for a flip. You can see how much cash you are making on the cash you invested. Once you have determined your cash flow, you can use the cash-on- cash return calculator to see what return that cash flow is giving you on your cash invested. Scroll down to the property details and you will find estimated tax and insurance values. Cells highlighted in green will show your results.Īdditional calculators for rental properties and house flipping Simply search for your target property or one similar. To figure taxes and insurance we have provided links to Zillow.For mortgage rates, we have provided a link to Bank Rate’s mortgage information.You will need to reference two tables for Maintenance and Vacancy values.
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