The free widget below provides a basic analysis of a property's investment potential. Of course, a paid version also is available and provides more flexibility, but the free version below is pretty good.
I tell clients new to investment properties who want to take a conservative (and I would suggest smart) approach to investing in real estate, such as a multi-family property, to assume rental property will be rented 45 months out of the next 60 months (on average nine months per year). For example, if the rental income is $2,400 per month, then multiply $2,400 by nine to get a conservative estimate of annual income.
Your property may be fully rented in the first two years, but vacant nine months in year three. You just can't predict it. If it does better than that, well, you have that much more cash to invest in your second property.
Of course, if you plan to occupy a part of the property, then your analysis would be a little different. If it is a commercial property, and you are certain you can obtain a long-term lease with a financially solid tenant (two big "ifs"), using 45 months rented out of the next 60 for your analysis might be too conservative.
Thanks for the tip, I've tried that widget and it was great, it help me analyze the investment quickly.
-James
Posted by: investment property rental mortgage advice | October 05, 2009 at 02:49 AM
Great post! thanks for the property analysis..and same here it's help me also to analyze.
Posted by: purchase property in us | February 10, 2012 at 08:22 AM