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Calculate the Net Profitability of your Rental Income Property

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Buying a real estate property with the goal of renting it is an investment that insures a constant cash flow income. However, even if it is a popular investment, when looking at the numbers, it is an opportunity comparable to any other investment like the stock market, government titles or other business projects.

This simulator will help you calculate the potential financial outcome, net of taxes, of your investment property, which could then be compared to other investment opportunities. However, this calculator cannot measure more qualitative aspects like the relevant expertise required to run the business, which can favor this form if investment over others.

< Read the rest of the introduction to this calculator

Please change the suggested values with your own in the blue text boxes.

Help with our calculators Help

Evaluate your real estate investment:

Purchase of Rental Property

Total purchase price of rental property
Purchase price of land Help If unknown, use 10% of the total amount
Purchase price of the building (excluding land)	$
Capital improvements to property (renovation value) Help The additions or improvements will be added on the property's value

Other acquisition costs Help Transfer tax, notary, legal fees, etc.
Cash invested Help The amount can include the disbursement made to buy the business (based on the evaluation of the future cash flow), the cash down on the mortgage balance and the additions or improvements to property.
Annual appreciation or depreciation of the property	%

Mortgage

Mortgage balance
Loan term (years)	Max: 50
Interest rate	%

Rental Income

Annual rental income Help Take into consideration the credit risk and empty units, a landlord will rarely collect 100% of rent from all the units.
Annual income from other services Help Other services include parking, energy, telecommunication, etc.
Annual increase of rent and other services	%

Annual Current Expenses

Licenses and property taxes
Repairs and maintenance
Insurances
Utilities Help Electricity, plumbing, gas and water.
Others Help Salaries, legal and accounting, telecommunication, publicity, real estate agent, etc.
Inflation on current expenses	%

Type of depreciation on real property Help

Taxes on gross income

Final Expenses on Property Sale

Realtor fees	%
Mortgage closing cost
Other costs of sale
Taxes on capital gain	%

Financial Analysis

Profit & Cash Flow from Rental Property

Duration in years of the analysis	(0-50)
Gross rental income	$
-[+] Total current expenses Help Current expenses are tax deductible	$

-Taxes	$
Net operation profit Help Those are the profits shown on the financial statement	$
-[+] Total capital expenses Help Capital expenses are non-deductible from taxes, but amortized	$

Depreciation Help The depreciation is not a real cash outflow, so we add it on the total cash flow	$
Total cash flow from rental income	$

Sale of the property at the end?
[+] Net profit from real estate resale	$

Net Cash Flow

Rate of Return on Investment

Initial Investment & Cumulated Profits

Initial investment	$
Cumulated profits	$

Net present value (NPV) &
internal rate of return (IRR)

Annual rate of return on cash flow Help Rate of return you require on the annual cash flow. To get the Internal rate of return, find the rate that brings the NPV to 0	%
-Initial investment	$
Present value of cash flows Help Value of all future cash flow discounted from the year it was cashed at the required rate of return	$
Net present value Help Value of all future cash flow discounted from the year it was cashed at the required rate of return, less the initial investment. If its positive, it is a profitable investment, if its negative, you should have invested somewhere else at that rate of return	$

When Will You Reimburse your Initial Investment?

Cash flow	(years)
Net present value	(years)

Progression Chart of Cumulated Cash Flow & Net Present Value

Progression Chart of Annual Cash Flow Flow & Net Present Value

Complete Analysis

For a more detailed view, here are all the numbers for every year of the analysis:

Year	Net profit Help Those are the profits shown on the financial statement	Annual cash flow Help The depreciation is not a real cash outflow, so we add it on the annual cash flow	Cumulated cash flow	Present value	Net present value

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Numbers in our calculators are rounded to two decimals.
The same calculations made in an Excel spreadsheet may differ slightly.

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-Total expenses on property sale	$
-[+] Taxes on property sale	$

-Interests on mortgage	$
-Operation expenses	$
-Depreciation	$