How to calculate properties for sale
The "For Sale" option includes all properties listed on the Multiple Listing Service (MLS), which is the integrated database among real estate agencies in the US.
MLS Address or MLS#.
To calculate the return on the investment, you need to fill in the address or the MLS# of the for sale property, which can be found on our website.
Rental Use.
Here you define how you intend to rent your property.
Short-Term are seasonal rentals generally sought by tourists who already rent on sites like Airbnb and VRBO, as seasonal properties are furnished like hotels.
Long-Term are monthly rentals for tenants who will live in your property for a minimum period of 6 months and who generally do not have furniture.
Payment Type.
The purchase of a property can be made in cash or through financing.
Cash is when the buyer has 100% of the resource available and pays off the property at the time of purchase.
Financed is when the buyer provides a down payment that can vary between 3% and 50% depending on the client's profile, and the remainder of the resource is financed through a financial institution.
Property Management.
Some owners manage the rentals of their properties on their own and others prefer to hire a property management company. To cater to both conditions, our calculator allows you to calculate the return on investment in both scenarios: Yes and No.
How to calculate custom properties
The custom mode is a calculator that calculates the return on the investment of any property, even if it is not for sale. For this calculation, you need to fill in additional information.
MLS Address.
This field allows you to use an address of a property that is on the MLS as a reference to calculate the rented comparables in the same region.
Price.
The property value must be added manually as the system does not have this data.
HOA.
The monthly Homeowners Association fee (HOA) must be filled in manually to add to the expenses.
Bedrooms.
In this field, you must manually fill in the number of bedrooms the property has.
The fields Rental Use, Payment Type and Property Management are the same fields as the calculator for properties for sale.
Understanding income projection details
Property Information.
This field displays the most important information of the property that was selected to calculate the rental forecast.
Calculate another property.
This field offers similar properties to calculate the results with another similar property.
Rental Income.
This field displays the gross monthly and annual rental income.
Short-Term.
The income of seasonal rentals are calculated based on the average daily rate and occupancy percentage which can be manually adjusted. The occupancy percentage is based on a 12-month period and has 80% as a default, which is the average occupancy of a property in excellent condition in a good resort. The average daily rate is based on the number of bedrooms and type of house. The costs of property management is based on the market and ilovevh, the company we recommend for this service.
Long-Term.
The rent amount is calculated based on similar comparables that were rented in the same area. The management cost is based on the market and the Authentic Real Estate Team, which also manages properties that rent for long term.
Financing Scenario.
Down payment. Represents the percentage and value of the down payment you intend to apply and can be manually changed.
Interest rate. Represents the annual interest rate practiced in the market or in the financing used and can be manually changed.
Monthly mortgage. The monthly installment of the financing composed of principal and interest.
Annual mortgage. Represents the annual financing cost composed of principal and interest.
Property Expenses.
The "SEE DETAILS" option presents the expenses that the owner is responsible for paying during the rental of the property.
Monthly expenses: Represents the sum of the property's monthly expenses.
Annual expenses: Represents the sum of the property's annual expenses.
Net Income.
The net income represents the result left over for the owner after paying all expenses involved during the rental of the property.
Net Income After mortgage.
The income after mortgage represents the result left over for the owner after paying all expenses involved during the rental of the property and also the mortgage. Knowing that the principal is not an expense, but equity.
Final Results.
Average annual appreciation. Represents the average percentage that a property appreciates in the region over a 12-month period.
Average annual principal. When the property is financed, the owner pays installments composed of interest and principal. The principal is the amount that reduces the outstanding balance of the financing amount and is considered equity. This value represents the annual amount reduced in the principal.
Total annual income. Represents the total return considering the annual net income + Average annual appreciation + Average annual principal (when there is a mortgage).
Disclaimer
This calculator was developed by Authentic Real Estate Team exclusively for informational and educational purposes, with the objective of assisting investors in evaluating potential real estate investments.
The results presented are estimates based on market data, historical information, comparable properties, and assumptions used by the system. Rental income, occupancy rates, vacancy rates, expenses, operating costs, and other information may be estimated and should be independently verified by the client, real estate agent, or calculator user.
Authentic Real Estate Team does not guarantee the absolute accuracy of the information provided, nor any level of profitability, appreciation, occupancy, or future financial return.
This calculator is intended solely as a support tool to help investors understand and estimate the potential return of a real estate investment and should not be considered a guarantee of future results.