Calculating Returns On a Rental Property (ROI with Excel Template)

13 Febuary 2020 Unleash your inner Financial Pro

The first 500 people who click this link will get 2 free months of Skillshare Premium: https://skl.sh/xelplus6

Get Access to My Course "Fundamentals of Financial Analysis" HERE: https://www.xelplus.com/course/learn-financial-analysis/

Rental property investing can be tricky. If you invest in real estate you need to make sure you maximize your returns! For that you need to properly calculate returns on your rental property.
Learn how to analyze a rental property and how to calculate the numbers to make sure your next rental property is a cash cow!
You'll learn the step by step real estate investing method for determining the monthly cash flow and cash on cash return for any rental property investment. This is a must-watch for anyone investing in real estate.

Summary of what you learn:
Learn how to analyze if a rental property is worth buying by calculating the Cash-On-Cash Return and the Return on Investment (ROI) of the rental property. We'll setup an Excel template, i.e, a rental property calculator which can also be adjusted for all kinds of investment decisions. Use this free Excel workbook to calculate the return on your investment so that your next investment will be a success. Focus on the numbers and make sure you plug in realistic assumptions!

In this video we'll go through all the required steps to calculate the monthly rental property income by identifying all related revenue and expenses. We will also use the Excel PMT formula to quickly calculate the monthly debt service for the externally financed part of the investment.

In a first step we'll calculate the Cash-On-Cash Return. This is the ratio (expressed as a percentage) of annual before-tax Cash Flow divided by the equity or own money invested in the property. This figure is useful when consistent monthly cash flows are the most important consideration for the investment. But because it's based on cash flows it considers the full debt service. So, both the interest and the principal pay down are deducted from the rental revenue. But most investors do not consider the principal payment as an expense. Because by reducing the outstanding principal balance we create equity.

Therefore, we'll also calculate the Return on Investment or RoI of the property. For this we'll exclude the principal pay down from the expenses. To do that we'll use the Excel formulas CUMIPMT and CUMPRINC to split the monthly annuity. The resulting cash flow we divide again by the equity invested in the property.

************************************************************
⯆ DOWNLOAD the Excel workbook here (scroll to the bottom of the blog post): https://www.xelplus.com/rental-property-roi-calculator-excel

More finance & accounting videos: https://www.youtube.com/playlist?list=PLmHVyfmcRKywV8Bk6euT02xxtv8YVDkZs
Excel advanced formulas: https://www.youtube.com/playlist?list=PLmHVyfmcRKyxvxehq3fiGjKDsEyy6d4Tz

************************************************************
★ My Online Excel Courses ► https://www.xelplus.com/courses/

✉ Subscribe & get my TOP 10 Excel formulas e-book for free
https://www.xelplus.com/free-ebook/

EXCEL RESOURCES I Recommend: https://www.xelplus.com/resources/

Get Office 365: https://microsoft.msafflnk.net/15OEg
Microsoft Surface: https://microsoft.msafflnk.net/c/1327040/451518/7593

GEAR
Camera: https://amzn.to/2FLiFho
Screen recorder: http://techsmith.pxf.io/c/1252781/347799/5161
Microphone: https://amzn.to/2DVKstA
Lights: http://amzn.to/2eJKg1U

More resources on my Amazon page: https://www.amazon.com/shop/leilagharani

Let’s connect on social:
Instagram: https://www.instagram.com/lgharani
Twitter: https://twitter.com/leilagharani
LinkedIn: https://at.linkedin.com/in/leilagharani

This video is sponsored by Skillshare.

Note: This description contains affiliate links, which means at no additional cost to you, we will receive a small commission if you make a purchase using the links. This helps support the channel and allows us to continue to make videos like this. Thank you for your support!

#MsExcel #Excel #LeilaGharani