Rental property expenses calculator9/25/2023 ![]() The annual debt service is your mortgage payment (both principal and interest). It represents the profitability of your investment by subtracting all of the expenses, aside from mortgage payments, you would expect to incur. NOI is the effective gross income – operating expenses. The calculator estimates both the monthly and annual net operating income (NOI). Furthermore, this does not include any major repairs or capital expenditures that might come up in the future. Keep in mind, older properties could have higher monthly expenses as more repairs might be required. The total monthly operating cost is how much it will take to operate the property on a monthly basis which includes repairs, maintenance, insurance, and more. The management fee is what it will cost to manage the rental if you hired a property manager or someone else to help out at the rental. The EGI is helpful in determining what the gross revenue you could anticipate receiving would be since it factors in potential vacancies which could reduce your revenue at the property. Monthly Effective Gross IncomeĮffective gross income (EGI) is the gross potential income – vacancy loss. Remember that 7% is the national average. The monthly vacancy loss is what you could expect to lose in income due to vacancies – this is determined by the anticipated vacancy rate percentage you in put above. This number reflects the total income a property could produce, but not what it will necessarily be. The monthly gross potential income is the total possible income when a property is 100% full. Property Operating Financial Outputs Monthly Gross Potential Income The annual rental expenses include the property taxes and annual insurance fee – remember these are the total costs for the year, not monthly. If you have an older property, your operating expenses might be more as there will be more maintenance and wear and tear. As the calculator inputs show, these are things such as maintenance, repairs, utilities, monthly HOA fees, and property management fees. Monthly rental expenses are the costs it will take to run your rental property. If you are unsure about the vacancy rate, the national average is around 7% – both rent and other income will be adjusted by this rate. ![]() Other monthly income might include parking fees, coin-op laundry, or pet rent. The monthly rent is the total anticipated monthly rent when it is fully rented – if you are curious on how to price your rental visit here. The rental income details include the monthly rent income, other monthly income, and the anticipated vacancy rate percentage. Remember, down payments are typically 10-25% of the purchase price, and closing costs are usually 2-5% of the purchase price. This will be different for every property – if you are purchasing a property in cash this won’t be necessary. The mortgage details include the loan term (years), the down payment cost, closing costs, and the interest rate. Square footage and the number of bedrooms are important because knowing how big the property is and how many bedrooms it has will determine its value and also impact your future rent price. Repair costs are the estimated total of repairs that will need to be made or possible renovations you are doing. The purchase price is usually the asking price of the seller which can obviously be negotiated once you decide to purchase the property. The property details section includes the property value/purchase price, property repair costs, square footage, and the number of bedrooms. ![]() Here are important definitions for the inputs and outputs in the rental property calculator: Inputs Property Details Rental property investing might seem complex, but once you understand the common terms when calculating your rate of return on a specific property you’ll be an expert in determining if you should invest in it or not.
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