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Real estate & rental

Real Estate Agent Investment Return Calculator

A complete return picture to show an investor client: cash flow, paydown, appreciation and tax position.

Your numbers

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Result

Total return over the period 81.25%
Annualised return 12.63%
Cumulative cash flow -$63.66
Principal paid down $16,945
Appreciation $61,321
Total gain $78,202
Total gain of $78,202 on 25 down, which is 81.25% over 5 years or 12.63% annualised. Appreciation contributes $61,321, and it is the least certain of the three components.

Not investment advice. Appreciation is modelled as a steady rate, which it is not, and it usually dominates the result. Selling costs, income tax on the rental profit, depreciation recapture and capital gains treatment are all excluded and are substantial. Show a client the version with appreciation at zero as well.

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Questions

About this calculator

Why show appreciation separately?

Because it is the component nobody controls and the one most likely to be wrong. Separating it lets a client see how much of the projected return depends on the market rather than the property.

What about tax?

Deliberately excluded, because it depends entirely on the investor's position. Depreciation shelters rental income and recapture reverses part of that on sale, and both need an accountant rather than a calculator.

The formula

total gain = cumulative cash flow + principal paid down + appreciation, measured against cash invested

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Estimating is the easy part

The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.