Analysis of Prospective Long-Term Rental Property Purchase : Input Data
Property Address: $
Purchase Price of Property
SAMPLE
420,000 100,000 10,000 -
$
310,000
Pct. Purchase Price from Buyer's Cash ( Buyer's Equity )
$
105,000
25.0%
Amount Financed (Mortgage ) Finance Rate Finance Term (years) Regular Principal Payments ? (Yes or No)
$
315,000 5.375% 30
75.0%
Beakdown of Purchase Price:
Land Appliances Furniture Structure
Annual Profit & Cash Flow (1st Year)
% Purch.Price
$ $ $ $
100.0% 23.8% 2.4% 0.0% 73.8%
Net Rental Income Property Ownership Expenses Interest Paid on Mortgage Depreciation - for Income Tax Income Tax Benefit
Net Property Income (after tax) Depreciation Taken Principal Payments Made
Net Cash Flow (after tax)
yes
Monthly Mortgage Payment (Principal & Interest)
$ $ $ $ $
18,360 (10,420) (16,931) (13,273) 6,234
$
(16,030)
$
13,273 ($4,444)
$
(7,201)
$1,781
Holding Period for Property (Up to 10 Years)
Projected Outcomes, If Property Is Sold
7
Annual Appreciation in Property Value (% per yr.)
5.0%
Selling Costs at End of Holding Period (% Sale Price)
7.0%
Sales Price of Property When Sold
$
590,982
Personal Income Tax Rate Capital Gains Tax Rate Recapture Rate on Accum. Deprec. for Capital Gains Tax
Taxable Capital Gain (after Selling Expenses) Accumulated Depreciation at Time of Sale Capital Gains Tax
$ $ $
222,523 92,909 47,014
Depreciation Life - Structure (Years)
28% 19% 25% 27.5
Depreciation Life - Contents (Years)
5.0
After Tax Rate of Return on Equity Investment
Estimated Property Ownership Expenses
Monthly
Annual
Regime Fee Regime Insurance (if assessed separately) Property Taxes Electricity Insurance (Contents/Liability) Phone (Basic Service) Special Assessment(s) (if any) Sewer and Water Charges Cable Television (Basic Service)
$ $ $ $ $ $ $ $ $
383 292 -
$ $ $ $ $ $ $ $ $
4,600 3,500 -
Property Owners' Association Fees Other
$ $
193 -
$ $
TOTAL ESTIMATED EXPENSES
$
868
Estimated Rental Income & Related Expenses Estimated Yearly Gross Rental Income
Year 0 1
6.3%
Principal Payments
Income Tax on Prop. Inc.
Interest Payments
(incl.depr & int.)
Net Proceeds from Sale* (before tax)
2 3 4 5 6
$ 105,000 $ $ $ $ $ $ -
$ $ $ $ $ $ $
7,940 7,940 7,940 7,940 7,940 7,940
$ $ $ $ $ $ $
4,444 4,683 4,935 5,200 5,479 5,774
$ $ $ $ $ $ $
16,931 16,692 16,441 16,175 15,896 15,601
$ $ $ $ $ $ $
(6,234) (6,167) (6,097) (6,022) (5,944) (5,862)
2,320 -
7 8
$ $
-
$ $
7,940 -
$ $
6,084 -
$ $
15,291 -
$ $
(5,775) $ $
$
10,420
9 10
$ $
-
$ $
-
$ $
-
$ $
-
$ $
$
21,600
$
1,800
-
$ $ $ $ $ $ $
271,213 -
$ $
-
Capital Gains Tax
12
Rental Management Fee (% of Gross Rentals)
-
$ $ $ $ $ $ $
(105,000) (7,201) (7,268) (7,339) (7,413) (7,491) (7,574)
$ $
47,014 -
$ $
216,538 -
$ $
-
$ $
Note: For Illustrative purposes only . Neither the seller nor Collins Group Realty engages in rental management or financial advisory services. There is no guarantee that the market value of the property illustrated will appreciate as shown, if at all. Property market values can decline as well as increase and capital gains tax rates are subject to change. You should discuss occupancy
15%
rates and potential income with a rental management company. Annual rental losses may or may not be deductible for income tax purposes,
Cleaning, Repair & Replacement (per month rented)
$
-
depending upon personal income. The above cost analysis is not intended to serve as a representation that the property illustrated is an
Rental Mgt.Company Marketing Fee (per year)
$
-
Net Rental Income after Related Expenses
$
18,360
investment of any type, or that you will derive any economic benefits from the ownership, sale or rental of the property. You should verify all financial figures yourself and review potential tax deductions with your accountant/tax advisor.
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Phone (843) 341.6300 or (800) 823.7516
Fax (843) 341.6301
Web: www.CollinsGroupRealty.com
After Tax Cash Flow
$ $ $ $ $ $ $
* after selling expenses and mortgage pay-off, if any
Average Number of Months Rented/Year Average Gross Rental per Month Rented
Net Property Income
Equity Investment
in Year 7
-