About Real Estate Investment Calculator
The price you should pay for income-producing property is a function of the cash flow. Too many investors look at criteria other than cash flow and end up making bad investment decisions.
This application will tell you immediately what a property is worth based upon its cash flow.
The output consists of two numbers:
- ROE (Return On Equity):
You have to spend a certain amount of money to buy and fix up a property. The ROE is the return on your money. If it isn’t higher than, say, a CD then the property is not a good investment.
- Cap Rate:
Everyone talks about it but nobody knows how to calculate it.
The relevant inputs are these:
- Purchase Price
- Monthly Rent
- Upgrade Costs
- Other Income
- Operating Expenses (opex)
Defaults are set into the program; enter the values for your particular property to find out whether the ROE is acceptable. If it isn’t, offer a lower price.
- George Fisher Advisors LLC
- Real Estate Investment Calculator
- Post Date:
- May 21, 2009