Gone are the days when
real estate investors have to research and analyze average costs and income,
entering their figures on spreadsheets. This slow and tiresome process becomes
even more unbearable when you need to create a spreadsheet for every property that
you have. The good news is the investment property calculator Sydney can help you
analyze multiple properties quickly at a time.
What Is an investment property calculator Sydney?
It is a tool that enters
investment cost assumptions generate automatic calculations and predictive
results to indicate if a property is a good opportunity for investment. There
are many calculations or values that help you conclude if you want to invest in
a specific property.
Cash-on-Cash Return. This gives
you returns on a property according to the amount of cash put in the
investment. You calculate it by dividing cash flow by investment costs. The
investment property calculator Sydney factors in the investment or startup costs of
furniture, appliances, down payment, and closing. By entering these values, you
can calculate the cash-on-cash return for a specific property.
Cash Flow. It is the
monthly profit of an investor. Think about it as the salary of investors. Cash
flow equates to the monthly expenses that is deducted from the monthly income.
It works on the following recurring monthly costs, HOA insurance, maintenance,
property tax, mortgage payment, utilities, and property management.
Cap Rate. You calculate
the cap rate by dividing the net operating income by property price. This
calculation is essential to investors as it is the purest form of understanding
your property returns. Cap rate indicates the returns of property independent
of its financing. In other words, this number shows the returns as if the
property was paid for already.
The investment property
calculator does not only give the returns according to what you enter but also
offers insights by using predictive and comparative algorithms and data.
It Is Definitely Better Than Spreadsheets
Using the investment
property calculator has some advantages over spreadsheets. Many investors can
spend months analyzing various areas to find the best real estate markets and
investment properties. But, the needed research does not stop there. After
that, they have to look at the comparables to estimate costs and income in
order to make the spreadsheets calculate returns.
Investment property
calculators do all of this work for you. The average values are already entered
into the formulas, removing the need to look at the comparables. This clearly
saves time and brainpower.
These calculators and
analyses are also based on historical and comparative data, which means
assumptions tend to be more accurate than estimates. Moreover, although this is
about numbers, there is a human aspect to using this tool. The calculator gives
an overall score of the neighborhood, grading how well it is for real estate
investing.
Investment property
calculators are the go-to tool in real estate investing. They are speeding up
the research process and making real estate analytics much easier to
understand. Therefore, start using an investment property calculator to save
time because searching for the best investment properties can take more time
and effort than you think.
