Hi there, what calculators do you use to analyze rental property deals (besides those on BP)? Thanks for any suggestions?
@Michelle N. - most of my stuff is initially done in my head or on the back of a napkin. If I start getting serious about a deal, the BP calculators work well. Then for some bigger projects that require more in depth modeling, I have used templates from GETREFM.
@Andrew Kerr . Thanks!
Howdy @Michelle N.
Are you wanting calculators or spreadsheets? A basic calculator is all I use for initial analysis (back of the napkin stuff). Since I like buying distressed properties I need to include more details for the Rehab portion. So I use a spreadsheet program developed by a BP member, Daniil Kleyman, called "Rehabvaluator". If you are interested in normal Buy & Hold rentals with minimum repairs the BP calculators should be sufficient. If you want more detailed stuff then you are looking for spreadsheet programs.
If you want to do it the old fashioned way:
PGI--potential gross income
-VCL--vacancy and collection losses (I use one month about 8%)--this may not apply to your area
+OI-other income (laundry, cable, etc)
=EGI-effective gross income
-OE--operating expenses (does not include financing)
=NOI--net operating come
You can then run a quick cap rate if desired
Properties do NOT require a mortgage, so mortgages are not factored into NOI
Once you have NOI, you can factor in a mortgage to determine your cash flow-if any.
I have a couple that I lose money on every month and knew this before I purchased them. They are on short term mortgages-five years or less--then my cash flow explodes. Before I took this on, I considered IF I could "feed them" and the answer was yes due to many others that are free and clear and producing enough cash to cover the negative ones. On top of that, I got them substantially under market. MAKE YOUR MONEY WHEN YOU BUY. I have got some great deals that I never ran the numbers on. I knew they were home runs.
@John Leavelle . I am looking for buy and hold rentals. Was just curious if there was something else out there that people use and I could compare. Thanks!
my head. Lol. Usually I calculate on the calculator that comes with every phone.
I use my own spreadsheet (also uploaded on BP). Don't care if you use mine, I just always encourage people to use something. Make sure you understand it and feel it makes sense to you.