HowTos Index

How To Calculate Gross Potential (GPI) Real Estate Income
Gross Potential Real Estate Income - This is an easy calculation of the expected gross revenues from an income property. For rentals, the monthly or annual rents for all the units is totaled. No losses for vacancy or non-payment are considered. In other words, the property is considered fully occupied with all payments collected.

How To Determine an Income Property's Value Using Capitalization Rate
If the net operating income of a property is known, and it is divided by the capitalization rate for similar properties, the approximate current value of the property will be determined.

How To Calculate and Use the Gross Rent Multiplier (GRM)
Gross Rent Multiplier or GRM is a tool used to assess the approximate value of a rental property by comparing its rental income with other like properties.

How To Calculate Net Operating Income NOI for a Real Estate Investment Property
Net operating income or NOI is the monetary result of subtracting operating expenses from Gross Operating Income. Gross operating income is that income after deductions for vacancy and credit loss for a rental real estate investment property.

How To Calculate Simple Interest for the Real Estate Investor
The formula and method for simple interest calculation, using principal amount, rate and time is presented here. Used frequently by those in real estate investing.

How To Calculate Compound Interest
Compound interest is interest on principal plus interest on the accumulated interest. Real estate investing requires a knowledge of how to calculate compound interest.

How To Calculate Capitalization Rate for Real Estate
To calculate capitaliztion rate (cap rate) for an income property that sold recently, you would divide the net operating income by the sold price to determine the capitalization rate. This percentage number could then be used to determine the value of another property if you know it's net income.

How To Calculate Gross Operating Income (G0I)
In real estate investment, we want to estimate the income of a property with a realistic estimate of losses due to vacancy and bad credit. This is called gross operating income or GOI. We subtract those estimated amounts from Gross Projected Income to arrive at Gross Operating Income.

How To Calculate After Tax Cash Flow (CFAT) for the Real Estate Investor
After Tax Cash Flow CFAT - Real Estate Investment After Tax Cash Flow CFAT About>Business & Finance>Real Estate Business> Real Estate Investment> Know the Math> After Tax Cash Flow CFAT - Real Estate Investment After Tax Cash Flow CFAT Most Popular Articles

How To Get Started as a New Real Estate Agent
Getting your license soon, or a new real estate agent? Here's a detailed plan for start-up success. Learn what you have to do for income and expense budgeting, choosing a broker, new agent marketing and more.

How To Determine Expenses and Plan Marketing Activity for Profits in Real Estate
As a real estate agent or broker, you're an independent contractor. Expenses and income for your business should be estimated carefully and a plan put in place to create the income to surpass expenses. With spreadsheets and the sales funnel process, it's not difficult and well worth a couple of hours of your time.

How To Calculate Return on Equity for Real Estate Investments in First Year
Return on equity, as calculated in the first year of a real estate investment, is the cash return after taxes divided by the cash invested in the property.

How To Calculate the Break-Even Ratio for Real Estate Investment
The break-even ratio of a real estate investment is the total of the debt service and operating expenses divided by the gross operating income. It is expressed as a percentage, the lower the better when lenders are looking at a deal.

How To Calculate Cash Flow Before Taxes (CFBT) for Your Real Estate Investor Clients
Cash flow is all the in and out flows of cash through a business, without regard to tax considerations. All money in or out is considered. This is Cash Flow Before Taxes or CFBT. The cash flow of a real estate investment is an important part of its viability as an investment. Rental properties are expected to cash flow more than mortgage payments and expenses to generate a profit.

How To Calculate Return on Equity in Subsequent Years of a Real Estate Investment
After the first year, or as a projection for future years, a real estate investor might want to calculate the return on equity formula for years after the first. This could be to determine if the return still justifies holding the property when it has appreciated in value and the mortgage has been paid down significantly.

How To Calculate the Loan to Value (LTV) Ratio of a Real Estate Property
When working with real estate clients, agents and brokers are frequently tasked to help buyers to determine what they can afford in a home. One of the factors is the size of the mortgage they can get. The loan to value ratio is the percentage of a property's value that is mortgaged. Lenders will make mortgages based on maximum loan to value for different types of properties.

How To Do a Real Estate Investment Profit Calculation
When a real estate investment property is purchased and resold at a profit, this profit calculation will yield the percentage of profit based on purchase price. If you're working with real estate investors, this is one calculation they like you to know.

How To Calculate Rental Vacancy and Credit Loss in Real Estate Investing
Rental vacancy and credit loss is the estimated dollar amount of lost rental income due to vacant units and non-payment of rent.

How To Help Your Client Justify an Income Property Price Using Capitalization Rates
Using the asking price of an income producing property and the capitalization rates of other similar properties in the area, one can calculate the income necessary to justify the asking price.