Investment Property Mortgage Calculator

by

An investment property mortgage calculator is a tool designed to help property investors estimate their mortgage payments, cash flow, and potential returns. Here’s a breakdown of the key components and calculations it typically includes:

Key Inputs:

  1. Property Price: Total cost of the property.
  2. Down Payment: Initial payment (percentage or amount) towards the property.
  3. Loan Term: Duration of the loan (e.g., 15 or 30 years).
  4. Interest Rate: Annual interest rate on the mortgage.
  5. Monthly Rent: Expected rental income from the property.
  6. Operating Expenses:
    • Property taxes
    • Insurance
    • Maintenance costs
    • HOA fees (if applicable)
  7. Vacancy Rate: Percentage of time the property is expected to be vacant.
  8. Other Costs: Utilities, property management fees, etc.

Outputs:

  1. Monthly Mortgage Payment: M=P⋅r⋅(1+r)n(1+r)n−1M = \frac{P \cdot r \cdot (1 + r)^n}{(1 + r)^n – 1} Where:
    • MM = Monthly payment
    • PP = Loan amount
    • rr = Monthly interest rate (Annual rate/12\text{Annual rate} / 12)
    • nn = Total number of payments (Loan term×12\text{Loan term} \times 12)
  2. Net Operating Income (NOI): NOI=Gross Rental Income−Operating Expenses\text{NOI} = \text{Gross Rental Income} – \text{Operating Expenses}
  3. Cash Flow: Cash Flow=NOI−Mortgage Payment\text{Cash Flow} = \text{NOI} – \text{Mortgage Payment}
  4. Cap Rate: Cap Rate=NOIProperty Price×100\text{Cap Rate} = \frac{\text{NOI}}{\text{Property Price}} \times 100
  5. Cash-on-Cash Return: Cash-on-Cash Return=Annual Cash FlowTotal Cash Invested×100\text{Cash-on-Cash Return} = \frac{\text{Annual Cash Flow}}{\text{Total Cash Invested}} \times 100

Would you like help calculating this for a specific property? If so, provide the details, and I can walk you through the calculation!

Leave a Comment