Rental Property Calculator

The online rental property calculator is composed of 2 sections:

1. Operating Assumptions

This is where you enter your assumptions regarding your rental property. It includes 5 categories:

Purchase Assumptions

Indicate your property purchase price and the estimated after-repair value (or ARV). You can also enter your financing assumptions in that section (down payment, interest rate, loan term, etc.)

• If your loan is an Interest-Only Loan, indicate the length (in years) of the interest-only period

Acquisition Costs

Enter your acquisition costs, including refurbishment/repair costs, purchasing cost, holding costs and other costs

• If you plan on financing some of these costs with debt, enter “1” next to that amount
• Holding costs refer to the cost of holding a property before renting it. For instance, you may have to spend a few weeks renovating the place before it’s ready for your next tenant, so costs such as utilities, insurance, HOA, etc that occurred during that period would be added to that category
• Once filled out, the calculator will estimate your total project upfront cost and how it is being financed

Sale Assumptions

Indicate your holding period (i.e. how long you expect to hold the property). If you do not intend to sell the property, enter 30 (which is the maximum number of forecasted years run by the calculator)

• Don’t forget to enter your expected selling cost (as a % of your property value at sale). Although it varies from one project to another, market standard is around 7-8%

Rental Income

Enter your monthly rent and the expected annual rent increase. If you have multiple units, simply add them up in that cell

• You have the ability to add other types of income related to your property (such as parking, laundry, etc.) if desired
• Enter your expected vacancy rate (i.e. time of the year when the property is not being rented – such as when switching tenants or performing renovations). You can select the appropriate unit as needed (% of rent, weeks per year or months per year)

Operating Expenses

Enter up to 7 different operating expenses. 3 can be entered as a monthly cost, 2 can be entered as an annual cost and the last 2 can be entered as a % of rent (i.e. variable costs)

• For each expense, indicate the expected annual increase. Note that variable expenses don’t have an expected annual increase as they will vary proportionally with your rent estimate
• Capital Expenditures (or CAPEX) refer to big-ticket items that need to be replaced every so often but not every month or year (such as roof, appliances, driveways, plumbing system, or other large infrequent items). Market practice is usually between 7% and 10% of your gross rent.

2. Summary Results

This section does not require any input from you and will describe the result of the analysis performed by the rental calculator. It will provide useful financial data over your holding period as well as calculate key financial metrics (described below).

The uses and sources table will also help you quickly identify how your project costs are allocated and how they are financed.

Finally, summary projections are also provided (each year for the first 5 years, then years 10-15-20 and 30).