Rental Property Analysis Worksheet.xls
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Rental Property Analysis
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Purpose: This tool helps evaluate a property's cashflow and other financial measures.
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NOTE: This should be used as a reference and should not be considered a substitute for consultation with your team/accountant etc. Use at your own risk.
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How To Use: Enter basic information in the green cells and the spreadsheet calculates various financial performance measures in the yellow cells.
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User Input field
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Automatic calculation
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Property Information
Cost Information
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Property Name
XYZ Property
Building Cost
$ 135,000
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Location
Atlanta, GA
Land Cost
$ 40,000
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Type of Property
SFH
Cost Basis
$ 175,000
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Size of Property
1600 Sq Feet
Less Mortgages
$ 140,000
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Equals Initial Investment
$ 35,000
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Amortization Period
27.5
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Ratio Information
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Loan to Value
80%
Mortgage Information
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Cashflow / Initial Investment
17%Balance
Payment (P&I)
Interest
Loan
Term
Amtz
Period
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Cashflow / Assets
3%1st Mtg $ 140,000 $ (668)4%30360
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CAP Rate
8%
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#
Description (All Figures are Annual)
Annual
Amount
Notes
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1
POTENTIAL RENTAL INCOME
$ 21,000
Total Potential Income if rented 100%
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Less: Vacancy
$ (420)
Assumed 2% Vacancy Factor
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EFFECTIVE RENTAL INCOME
$ 20,580
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Plus: Other Income
$ -
Other Fees, charges, etc
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GROSS OPERATING INCOME
$ 20,580
Total Revenue
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OPERATING EXPENSES
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Real Estate Taxes
$ 3,900
Property Taxes
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Personal Property Taxes
$ -
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Property Insurance
$ 500
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Off Site Management
$ -
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Payroll
$ -
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Expenses/Benefits
$ -
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Taxes/Worker's Compensation
$ -
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Repairs and Maintenance
$ 500
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Utilities
$ 150
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Accounting and Legal
$ 200
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Licenses/Permits
$ -
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Advertising
$ 100
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Supplies
$ 100
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Lawn and Grounds Keeping
$ 750
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Miscellaneous
$ 500
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TOTAL OPERATING EXPENSES
$ 6,700
Sum of Line 6 thru 23
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NET OPERATING INCOME
$ 13,880
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Less: Annual Debt Service
$ (8,021)
Total Mortgage Payments (Principal & Interest)
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CASH FLOW BEFORE TAXES
$ 5,859
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Add Back: Principal Payments
$ 2,421
Principal Paid on Loan
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- Depreciation
$ (4,909)
Tax Depreciation on Building
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TAXABLE NET INCOME (LOSS)
$ 3,371
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Definitions
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Loan to Value (LTV) = Loan / Property Value
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LTV is a measurement of leverage. The higher the LTV, the more leveraged a property. Bank's use this to determine the
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riskiness of a loan. Generally, banks do not loan above 85% LTV.
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Net Operating Income (NOI)
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Total Potential Income
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-
Vacancy
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=
Effective Gross Income
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-
Operating Expenses
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=NOI
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NOI measures the profitability of a property by excluding the cost of debt (mortgage). It essentially looks at the profitability of
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the property if it were paid off.
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Cap Rate - Net Operating income / Sales Price
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The Cap Rate is common measurement tool used by real estate professionals to measure the attractiveness of a property.
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Cap Rate measures NOI as a percent of Sales Price. The higher the Cap Rate the better.
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