Investment Logo. Residential Investment Calculator

Residential Income Analyzer.

This calculator will help you figure out the amount of income you could realize by renting out a specific commercial property. First enter the information pertaining to the purchase of the property and the loan you secured for it. Then enter information about the property, including gross scheduled income (GSI), vacancy rate, the number of units, and so on. Next enter the monthly costs associated with the upkeep and maintenance of the property in the fields provided. There are many costs to consider here, so make sure that you are more than thorough.

Once you’ve filled in the appropriate fields and you press CALCULATE, you’ll get a detailed breakdown of the income you could be generating from your property. Click on “Printer Friendly Report,” and a new browser window will open with a printable report. This calculator figures numerous important factors for determining the potential and viability of an existing or proposed residential income property, including: DSCR (Debt Service Coverage Ration), NOI (Net Operating Income), NIM (Net Income Multiplier), CAP (Capitalization Ratio), and more.

Property Information Help & Instruct
Purchase Price: To recieve help and/or instructions on any given line item, click inside the adjacent entry field.

Down Payment: %
Loan Term (Years):
Interest Rate (%):
Payment Type (Select P & I or Interest-Only):
P & I Payment ($):
Closing Costs ($):
Annual Gross Scheduled Income (GSI):
Vacancy Rate (%):
Number of Units:
Other Income (Annual laundry, late fees, etc.):
Capitalization Rate Required (Optional):
Annual Opertating Expenses Help & Instruct
Accounting ($): To recieve help and/or instructions on any given line item, click inside the adjacent entry field.

Admin/Legal/Bank Charges ($):
Advertising ($):
Electricity ($):
Elevator ($):
Gas ($):
Landscaping ($):
Legal ($):
Maintenance & Repair ($):
Payroll Taxes ($):
Permits & Licenses ($):
Pest Control ($):
Pool ($): To recieve help and/or instructions on any given line item, click inside the adjacent entry field.

Property Insurance ($): %
Property Management ($): %
Real Estate Taxes ($): %
Security ($):
Supplies ($):
Telephone ($):
Tenant buyout ($):
Trash ($):
Water ($):
Other ($):
Other ($):

Income Statement & Cash Flow Explanations
Gross Scheduled Income (GSI): For an explantion of any result, click in the adjacent result field.

Less Vacancy:
Total Actual Annual Income:
Other Income:
Gross Operating Income (GOI):
Total Operating Expenses:
Net Operating Income (NOI):
Annual Debt Service (Mortgage Payments):
Before Tax Cash Flows:
Key Operating Ratios Explanations
Capitalization Rate (CAP): For an explantion of any result, click in the adjacent result field.

Cash on Cash (COC):
Gross Rent Multiplier (GRM):
Net Income Multiplier (NIM):
Debt Coverage Ratio (DCR):
Expense Ratio (ER) per Unit :
Price Per Unit:
Property Value Based on Required CAP Rate (if entered):

5 Tips for Managing Residential Properties

Do It Yourself Cartoon.

Instead of selling your home when you move to a new one, consider renting it out for additional income. Owning more than one piece of real estate can be a good investment, and you can come away with extra money each month after you have made the mortgage payment. Renting, however, is a big consideration that comes with many responsibilities. Whether it is your first time renting out a property or you're managing multiple rental properties, there are a few things you should consider.

How to Pick Good Tenants

When you're renting out a property, getting the right people as tenants is a very important aspect. But how do you know whether someone is going to be a good tenant? First, when they respond to your advertisement don't be afraid to ask them questions. Ask what drew them to your property, what they're looking for in a rental, and why they want to move. If they can provide credit history and references and seem like they would be a good fit for your property, then meet with them in person.

Do not forget to verify two very important things: the potential renter's credit history and job history. Someone with bad credit and a spotty job history is more likely to bounce checks or fail to pay on time. A tenant who has been in the same job for at least two years and who has good credit is your best bet. The typical amount of someone's income that goes toward rent is anywhere between 25 and 30 percent. This is a good benchmark for determining whether someone can afford your property, but can fluctuate depending on how much the potential tenant makes and how much you're charging for rent.

Regardless, you don't want to rent to someone who can't prove that they will be able to pay. Also, make sure they are up front about who they will be living with, and have each person who will be living in the house sign the lease. That way you're legally covered, especially should tenants decide to allow a new party to move in without checking with you first.

Things to Include in Your Lease Agreement

As a legal document, your lease agreement protects both you and the tenants and should include every detail of what they can expect when renting from you. But that doesn't mean you have to be inflexible. If a tenant wishes to change something in the lease agreement, such as allowing for a pet when you originally did not consider it, you can always negotiate a higher monthly rent payment or alter some other part of the lease or security deposit.

If you don't have a lawyer to help you draft a lease agreement, you should at least include certain items in the agreement. First, check any local, state, or federal laws regarding leasing properties to be sure you comply with regulations.

You want to have every single tenant listed on the lease and declare an occupancy limit for the rental property. You also need to set a term for the lease (one year is most common, though certainly not the only option) and be clear about how much the total cost of rent is each month. Don't forget to mention whether that includes utilities and, if so, which ones.

Next, be sure to cover any other money-related matters. Discuss the amount of the security deposit, how and when you will return it to the tenants, and what kind of damages would result in a partial or full loss of the security deposit. If you want to put a late fee on overdue rent or bounced checks, be sure to include those stipulations in the lease, as well.

Finally, go over repairs and maintenance and how much notice you need to give tenants before you enter their rental property and for what reasons you will need to do so. You'll also want to include a section outlining what activities are not allowed. This could be anything from having a certain number of pets to actual illegal activity, such as selling drugs. You want to protect yourself legally if your tenants end up doing anything outside the law.

Choose the Right Insurance

Typical homeowners insurance might not cover renting your property. That's why there's separate insurance for landlords. This insurance is not the same as homeowners' insurance, but it covers major catastrophe risks like fires or theft. Depending on the policy, you can get coverage for lost rental income, damage to your belongings (though not for tenant belongings), and protection for loss of income in case of damage that makes the property uninhabitable.

You also want to be protected from liability should anything happen to the tenant while on your property. Make sure you understand exactly what you're being insured for. Some of the most important parts of these policies, like protection should you lose rent money for some reason, cost a little extra, so you might have to pay more than you're used to for homeowners insurance. Ultimately, no matter how great a tenant may seem, you want to protect yourself against damage, lost property value, and potential lawsuits.

Repair and Inspect Regularly

As a landlord, you're required to keep your property at a certain level of cleanliness and livability. State and federal laws will cover the basics of what you need to do. Beyond that, however, the better space you provide for your tenants, the more eager they will be to keep it in good shape while they live there.

You want to take care of the basics regularly and account for wear and tear. No matter how good the tenant, things are going to break or wear out eventually. Certain things, like plumbing, caulking, and temperature control, should get yearly maintenance. You can also carry out inspections. If you want to, put in the lease agreement that an inspection will happen every three to six months. Otherwise, simply perform routine maintenance every so often, giving the tenant proper notice of course and looking around for other issues while you're there.

A good landlord is also responsive to tenant repair needs. If a tenant calls you with a problem, respond very quickly. This has several advantages. First, you won't be letting a small and easily fixable problem grow into a gigantic one. Second, you'll keep good, responsible tenants in your property if you stay on top of the repairs they need. Being responsive also encourages them to let you know when something goes wrong, which allows you to keep a good eye on your property.

Be aware of some of the things you might have to deal with as a landlord. Mold is a problem, especially in humid climates. Bug infestations or rodent problems can happen pretty much anywhere. Don't blame the tenant if something should go wrong, unless it's very clear that the tenant's failure to inform you of a problem or misuse of your property caused or worsened the problem. The difference between the two is something you can outline in your lease to legally protect yourself and your property.

How to Manage an Out-of-Town Property

Perhaps you want to acquire more rental properties in an area other than where you live. Or perhaps you're moving somewhere else and prefer to rent your former home out rather than selling it. Either way, you might find yourself as a landlord to a property situated somewhere other than where you live.

If this becomes your situation, don't try to manage everything yourself from far away. Your best bet is to hire someone to manage from within town. Make sure to set up very clear parameters about how this manager should run things while you're not physically present, such as getting your permission before agreeing to any large repairs. Make it very clear what the manager is allowed to do alone and what he or she needs your permission for.

You also have to make things clear to your tenant and decide how much contact with the tenants you're comfortable with. Just because you live out of town doesn't mean you can ignore your rental properties. Visit them at least once a year to inspect them. Touch base with your manager regularly. The plus side is that any visit you make to your rental property is tax-deductible, so be sure to document your expenses, such as gas and lodging, while you're doing your duty as a landlord.

No matter how long you've been a landlord, whether it's your first time or you've been renting out properties it for years, these are good guidelines to follow. Keeping yourself and your property legally protected is paramount, as is understanding how to find good tenants and deal with them. The last thing you want is to face someone who rarely pays on time. By being clear with your expectations, responsive to issues and keeping your property in good repair, you will make your life as a landlord easier on yourself.



Change privacy settings

Current Mortgage Rates