Does anyone have the formula to calculate the percentage return on a real estate rental property that takes into account: Monthly income, monthly expenses, property appreciation, mortgage interest rate and the IRS tax depreciation?
2006-08-21 09:16:46 · 3 answers · asked by Gamer65 1 in Business & Finance ➔ Investing
You can't do it with a single formula. You need to build a stream of cash flows (usually, annual rather than monthly), add property purchase at the front and property disposition at the back end, if applicable, and find the IRR of those cash flows.
2006-08-21 09:47:38 · answer #1 · answered by NC 7 · 0⤊ 0⤋
you can do it monthly, but it really depends on your time frame. over a 27.5 year period, it won't make much of a difference. excel has an IRR function or you could create a spreadsheet that uses separate columns for each transaction, then add a final column to calculate the Net Present Value of each period. the rate that sets this # to 0 is the irr
2006-08-21 10:13:22 · answer #2 · answered by myersei 3 · 0⤊ 0⤋
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2006-08-22 05:27:55 · answer #3 · answered by Anonymous · 0⤊ 0⤋