Real Estate Investment Calculators That Will Make You Buy Smarter
When it comes to real estate investing, you don’t have to be a real estate agent or have a math degree. Fortunately for us, there are loads of real estate investment calculators that will help you make smarter decisions when it comes time to buy a home or investment property.
Read on for a list of the best calculators on the internet, as well as a list of what should be included when deciding which property to buy.
How To Buy Smarter With Real Estate Investment Calculators
Calculating the return on investment with real estate can feel like a complex process. Which is why we’ve compiled a simple list of real estate investment calculators that will help you quickly analyze the potential profitability of any given property. The goal with a custom calculator is that you lower the risk and maximize your profit.
We also tried to provide the formulas used so that if you need to do work by hand, you can!
Software or Browser-Based Real Estate Investment Calculators
Cash Flow Analyzer has different versions of their calculator to help landlords, flippers, and even helping people establish a mortgage cash flow analysis. A little pricier, this is a downloadable software that will be your go-to if you’re a long time investor.
This is one of the free on-screen real estate investment calculators that give you a quick calculation of the value of your investment or rental property. Instantly calculate the ROI, cash flow, and IRR.
Here are a few things you should know before entering:
• Current Value
• Cash Investment
• Mortgage Rate
• Property Improvement Costs
• Tax Rate
• Rent Cost
Financial Mentor has a free calculator that makes the process of crunching numbers easy. Similar to the above calculator, this one is on screen and gives you step by step instructions and tips to help you get the most accurate results.
Bigger Pockets has a whole slew of real estate investment calculators that give you an analysis for fix and flip properties, potential rentals, wholesaling costs, and even mortgage payments.
We like how clean the reports are for these and how they help you feel like you’re building a smart and solid plan.
Formulas You Should Know
FortuneBuilders gives a list of the top 10 most important real estate formulas you should know as an investor. They include the formula as well as an example so you can get started with your investing business.
In order to calculate a monthly mortgage payment, you will need the loan principal, interest rate, and loan term.
Mortgage Payment = P [r(1 + r)^n] / [(1 + r)^n – 1]
P: loan principal
R: monthly interest rate
N: number of monthly payments
Rent Cost Ratio
This rent to cost ratio is a great tool for comparing income values for similar properties in the area you’re looking in so that you know if a property is a good deal.
Rent Cost Ratio: (Monthly Rental Income / Total Property Price) x 100%
This formula helps you evaluate the net operating income (NOI) produced by an income property in relation to the total purchase price.
Capitalization Rate = (Net Operating Income / Total Property Price) x 100%
Now that you know what to consider before buying a fixer upper or investment property, make sure you know the risk so that you can ultimately make the best choice. Let us know if you think that real estate investment calculators have helped you make smart decisions, or if you prefer to analyze the expenses by hand.
Remember that a real estate agent is a great person to have on your team. Whether it’s your first investment or you’re a pro with buying fixers and rental properties, having a seasoned real estate agent to help give their advice and information on specific houses.
If you have questions, give us a call at (406) 298-5888 or contact us today and let us help.