My Excel spreadsheet helps you quickly and easily determine whether a rental property will cash flow. (Read my blog post, How To Invest In Real Estate, that inspired this worksheet.) To download, you must first subscribe to my blog:
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This sheet is strict. You should not be surprised if every property you run through it is negative. It counts things like “loss of income” (the value of your down payment invested at 8%), for instance. If you don’t want to count a certain value, just clear its contents.
All yellow-highlighted cells are ones you need to fill in to make the calculations work. It is designed so you can compare two properties at a glance (left side and right side of the worksheet) as well as a best-case and a worst-case scenario for a single property (useful if you offer under list price, if you need to estimate repairs, or if you are not sure what it will fetch as a rental.)
For the building value, look up the property on zillow.com or another site that will show you the tax paid split out by building and land value. This is important since you can only depreciate the cost of the building, not the land. Make sure you get this right or your properties may be more expensive than you intended!
The property tax is currently set at 1.34%. If yours is less or more, change the number in E16, and the other cells will update automatically.
The rental income says “TOTAL” for those who intend to purchase multi-family housing. Simply add up the total amount of rent paid by all tenants. If you plan to live in one part of the dwelling, assume for this worksheet that you plan to “rent to yourself”, and add what you would pay in rent to the rental income line.
Want to learn more about real estate investing? Read my other blog posts about real estate.