Pick your tool to calculate the value of your income producing real estate

.

Use our CalcApp to determine the value. Get value when you choose the capitalization rate. Simple to use and easy to understand. For your PC or tablet or phone.

Click here to open the CalcApp for any device.

.

Click here to Download and open a Microsoft Excel spreadsheet. Just fill in your data into the Yellow cells and see the value and “Cash on Cash” % investment return.

.

Click and Download a Google Sheet to calculate the real estate value and “Cash on Cash” % return.

.

Helpful hints for better results

Change the input fields with your own property financial info.The app will change those fields which you can not change, such as Property Value, Total Revenues, Total Operating Expenses, Cash on Cash Return, etc, etc.

Your data input field values are “Persistent”.Enter a few values and then turn off your device, you will find that those same values are there when you start the app again. This can be incredibly useful, enabling you to enter values that never or rarely change when you first start the app, saving time when using the app later.<br><br>

The data field values for persistent fields are stored on the device itself, meaning that if you use an app both on your cell phone and on your desktop computer, they won’t have the same field information unless you enter the same information twice. While the app is stored in the cloud (on our servers), your input field data is stored locally, on your device.

It is important to include only normal operating expenses.Know that extraordinary capital expenditures should be amortized over years. (accounting theory).

We have assumed that the input field entitled “Reserve for Future Capital Expenditures” is an annual estimate of your amortized capital expenditures for items such as:Major repairs, roofs, foundation repairs, concrete driveway, HVAC replacement, large appliance purchase, etc.”Reserve for Future Capital Expenditures” is like money set aside each year when planning for a future major expenditure

Important to know that a buyer may be subject to higher or lower up-to-date insurance rates.

Ad valorem property taxes may be higher or lower, based on the purchase price

This is effected if the sales price is reported to the county appraisal jurisdiction. Texas is a non-disclosure state, however properties listed for sale on-line, may require that the listing broker report the sales price.

IF the property is owner managed, you should input a reasonable value for Management Fee, for the owner’s value of time.It is common for a professional management company to charge 10% of revenues collected. 6 % of revenues for onsite management and 4 % of revenues for off-site management Depending on the size of the property

Properties which are leased Triple Net (NNN) may have only a small Asset Management fee, because the lease calls for the tenant to be responsible for taxes, insurance, maintenance and management.

.

“Capitalization Rate % ” = Annual Net operating income divided by cost (or value)

Value(or cost) = Annual Net operating income divided by ‘Capitalization Rate %”

Value = Annual Net operating Income times multiple

Another way to think about the cap rate is that it’s just the inverse of the price/earnings multiple.

12 % = 8.33 multiple

11 % = 9.09 multiple

10 % = 10 multiple

9 % = 11.11

8 % = 12.50

7 % = 14.29

6 % = 16.67

5 % = 20

As shown above, cap rates and price/earnings multiples are inversely related. In other words, as the cap rate goes up, the valuation multiple goes down. When you pick the Capitalization Rate, the app will give you the dollar $ value.

Know that an appraiser will determine value using 3 approaches:

Income approach (as represented herein)

Comparable approach (using similar property sales)

Replacement approach (Land value plus depreciated building)