Need help with the rental property calculator

4 Replies

I'm trying to determine if I should sell any/all of my rental properties in my area and invest somewhere else. Question: when using the rental property calculator, should I put in the current income/expenses or use the income/expenses in the year that I bought the property.  I've had some of them for several years and they've really increased in value.  Thanks for your help!

I would use the numbers of what is currently getting. That will give you some kind of an idea what kind of return you are seeing per year right now. Hopefully you are pulling profit and loss reports from your books and determing your return on investment each year anyways.

Also - be very careful of the tax implications of selling rental property. You'll want to look into a 1031 exchange.

@Evangeline O'Dowd

I think you want to look at a lot of factors that may not be seen in the calculator before you decide to sell your properties and invest elsewhere.

Are the "class" of properties the same in the area you currently invest in and the area you plan to invest in?
I.E. Are you trading a class B property for a class D property. The Class D property will likely cash-flow more...but is the extra return worth it?

Will there be any tax implications of the sale?
If the properties increased in value and you decide to sale, you may want to consider a 1031 exchange, especially since you would continue to be involved in real estate. You may want to consider connecting with @Dave Foster in the event that you decide to sale the properties and want to do a 1031 exchange. He is a 1031 expert and 1031 intermediary who can help facilitate the transaction.

In regards to your question - I would input current year income/expenses and values.

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