Real Estate AnalysisInvestment Property Calculator – A Simple Guide on Using it by Nasser Mansur April 29, 2018April 19, 2018 by Nasser Mansur April 29, 2018April 19, 2018What is an Investment Property Calculator in Real Estate Investing?An investment property calculator is a tool that allows real estate investors to do calculations and projections for an investment property to determine its rate of return on investment.There are multiple types of an investment property calculator depending on the type of investment that you’re making and the metrics that you’re using to calculate the return on investment. For example, Mashvisor utilizes an investment property calculator that focuses on calculating the cap rate and the cash on cash return of an investment property.To learn more about our product, click here.However, there are certain factors that should exist in every investment property calculator in order to achieve the most accurate results:Method of FinancingThe method of financing is a very important aspect to take into consideration when calculating any metric that is related to investing in real estate and the rate of return on an investment.The method of financing refers to whether you’re using cash or a mortgage to purchase the investment property. It is especially important to include it in the calculations when using a mortgage. This is because the mortgage payments and interest rate make up a large sum of the total expenses that will apply to your investment.Related: The Airbnb Profitability Calculator: The Best Friend of the Short-Term Rentals InvestorExpensesIt isn’t possible to use an investment property calculator without including the expenses. This is because the investment property calculator will generally calculate the return on investment based on the amount of profits that the property will generate and the amount of expenses that will be subtracted from these profits.When searching for a calculator, make sure to use one that includes all the different types of expenses and costs that will affect your investment or one that gives you the option to include custom expenses in order to get the most accurate and realistic results.The major expenses that should be included are the first-time startup costs as well as the recurring expenses.First-time Startup Costs:Closing costsInspection feesRepair/renovation costsFurniture & appliancesRecurring Expenses:InsuranceUtilitiesProperty managementProperty maintenanceProperty taxesHOA feesRental income taxThe Return on InvestmentThe final aspect of an investment property calculator is the results. Depending on which metric you’re using, the end result should take into consideration all the expenses that will apply to your investment as well as the money that you are generating.If you’re using a rental strategy, for example, the calculator will take the amount of rental income that the rental property is generating as well as the total expenses in order to calculate the return on investment using any of the available metrics.Related: Where Can You Find a Rental Property Calculator?Mashvisor’s investment property calculator focuses on two of the most common metrics in its calculations, which are the cap rate and the cash on cash return. It will also include important factors such as the property’s occupancy rate and the comparable rental income in order to give you the most accurate and realistic results. Start Your Investment Property Search! START FREE TRIAL Start Your Investment Property Search! START FREE TRIAL 0FacebookTwitterGoogle +PinterestLinkedin Nasser MansurNasser is an experienced content writer with a degree in English Language and Literature. He loves writing about all aspects of the real estate investing business with focus on market and property analysis and the best sources which every real estate investor needs in order to succeed. Previous Post Real Estate Investing for Beginners: Where to Invest in Real Estate Next Post Airbnb Investment or Traditional Investment: How to Determine The Optimal Strategy Related Posts What Is a Good Gross Rent Multiplier? The 3 Steps of the Sales Comparison Approach to Real Estate Valuation What Are Real Estate Comps and How to Easily Find Them in 2021? How to Do Investment Property Analysis The Complete Guide to Price to Rent Ratio in Real Estate Investing Investment Property Analysis: Real Estate Investing How to Do a Real Estate Market Analysis in 2020 ARV Real Estate: What Is It and How to Calculate It? Real Estate Investment Opportunity Analysis: Choose the Best Real Estate Investment Strategy This Is How Not to Do Real Estate Market Analysis Rental Property Calculator: The Competitive Edge You Need in a Seller’s Market What Kind of Monthly Airbnb Profit Margin Can Investors Expect?