Simple calculator for Property Investors- Do the figures stack up?

One of the main things you should be asking yourself when deciding to invest in a property for  rental income is ‘do the figures stack’? But what does ‘Do the figures stack‘ really mean? I use Return on Investment (ROI) as the key measure, afterall, this means what level of return do I get from the money that is sunk into the property. I then compare this to the alternatives (e.g interest from a savings account, low risk and solid return 0.5% per annum or buying shares in a company, higher risk, higher return maybe upto  8%  return, or even putting some money into Crowd funding like Funding Circle, which I currently net 5.5%, medium risk and medium returns). Your return must compensate you for your effort  and time and also the level of risk in the project. I personally look for a minimum of 10% return but your level of return will depend on the specific alternatives that are available to you. It is important for  you to get this figure clear in your head before you start looking at deals. So, I have devised a very simple spreadsheet to help you quickly calculate what is the ROI on a property deal, assuming that you get a  discount on the purchase price and your remortgage back up to market value 6  months later.If you are buying at market value simply plug this into the Purchase price  cell. Have a play and familiarise your self with how the figures move, how the figures stack, before  you plough alot of money into a  deal. Good Luck!

Download (XLS, 24KB)

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