Is there a software program or an equation to figure out how much down payment to put on a property, given the amount of rent income anticipated, minus all the expenses (taxes, upgrade, etc.) to produce at least a balanced or even a positive cash flow?
Sue
Comments
Quicken.com
There are a bunch of free calculators online at.
Now is a really good time to buy investment properties. Perhaps the best buyers market I’ve ever seen.
1) Find out what the property costs. Figure out how much you need to put down. Find out what the loan payment (principal interest) will be on the balance – use a financial calculator. Figure out your total monthly cost by adding payments for property tax, homeowner’s insurance, HOA fees, and management fees.
2) Figure out how much rent you can get for the property. Now make an allowance for vacancies, subtract your total monthly cost, and this is will be your cash flow. Keep in mind that even if you have a positive cash flow, after depreciation you may have a deductible tax loss.
There’s no way to simplify the math – you’ve got to do the calculations for each property to determine whether or not it’ll work. Good luck.
