MMM Rental ROI
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Green fields are for user supplied data
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Renter OccupiedOwner Occupied
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Acquisition Cost
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Current Value (Purchase Price)$450,000$630,000$450,000$550,000
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Closing Costs1.5%$6,750$9,450$6,750$8,250
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Repairs/Improvements$25,000$0$25,000$0
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Total Investment$481,750$639,450$481,750$558,250
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Calculate Mortgage on 100% (a)100%100%100%100%
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Principle$481,750$639,450$481,750$558,250
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Rate (b)6.5%6.5%3.5%3.5%
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Term360360360360
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Monthly Payment$3,045$4,042$2,163$2,507
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Calculate Overhead
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50% Rule (vacancy, repairs, property management, taxes, insurance) (c)50%50%35%35%
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= Overhead$1,150$1,400$805$854
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Market Rent$2,300$2,800$2,300$2,439
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Calculate Return
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Rent$2,300$2,800$2,300$2,439
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- Mortgage-$3,045-$4,042-$2,163-$2,507
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- Overhead-$1,150-$1,400-$805-$854
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Net Return-$1,895-$2,642-$668-$921
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Annual Gain/Loss-$22,740-$31,701-$8,019-$11,057
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Rate of Return-4.72%-4.96%-1.66%-1.98%
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(a) In reality, you would put down >= 25% for investment property and about >= 20% for owner occupied
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(b) Renter occupied mortgage vs. owner occupied mortgage rate
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(c) 50% rule for renter occupied, vacancy and management are mute for owner occupied, so estimate 35%
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