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Best way to place value on a potential rental property

Posted on 2/4/15 at 9:11 am
Posted by TheIndulger
Member since Sep 2011
19239 posts
Posted on 2/4/15 at 9:11 am
For landlords or future landlords of the money talk, how do you value a potential rental property?

Do you consider your investment simply the down payment plus closing costs and cost of any initial work on the house, and the yearly return the rent minus mortgage/taxes and repairs?

Or do you somehow factor in that you are gaining equity on the property in the meantime? Not really sure how to factor that in.

This post was edited on 2/4/15 at 9:20 am
Posted by ntgreek00
Metairie
Member since Sep 2013
350 posts
Posted on 2/4/15 at 10:38 am to
You have to factor in the equity you gain.
Posted by eng08
Member since Jan 2013
5997 posts
Posted on 2/4/15 at 10:41 am to
I have several different outputs and factor in depreciation, equity, cash on cash return etc.
Posted by ItzMe1972
Member since Dec 2013
9803 posts
Posted on 2/4/15 at 11:31 am to
Use the following spreadsheet. You can also download the Excel one if you desire. Fill in the top section and the returns will show below.

LINK /
Posted by TheIndulger
Member since Sep 2011
19239 posts
Posted on 2/4/15 at 12:36 pm to
Thanks for the spreadsheet, I'll check it out

So regarding the equity, I would add the mortgage payment and rent, then subtract interest and taxes.
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