Yesterday, myNOI covered Step 6 of the Investment Property Valuation Calculator (IPV). In the final step, investors can see a ten-year forecast of their commercial property, along with information on their loans. This handy report can act as a loose guide on investments and provide you with a direction concerning where to put your money.
The final step of the Investment Property Valuation Calculator is a summation of everything you’ve entered before. The result is a downloadable report that lays out the ten-year estimated cash flow for your property based on the information given.
You’re familiar with many of these terms already from previous steps, but we’ll detail some of the new ones you may not recognize.
The Net Cash Flow is the money that remains after expenses and loan repayments have been taken out of your revenue.
Cash on Cash Return is a common way in the real estate industry of looking at your returns. It is calculated by dividing your cash flow by the amount of your total investment.
Principal Reduction is the amount of money you will have paid off that year toward your loan. With Cumulative Principal Reduction showing you the total sum of your payments so far.
The final report also lists how your loan payments will play out over the entire amortization period. Each month is detailed with how much you will be paying, the interest you’re paying on it, and the cumulative payments made so far.
To receive a PDF of the final report, click the “Email Me Results” and enter your email address.
From this final step, you can go back and edit any of the previous numbers you put in to see how they may affect the outcome of your property. Try lowering the interest rate to see how much .2% could save you over 30 years. Or experiment with rent prices to find the happiest medium between satisfied tenants and sufficient cash flow.
Thank you for your interest in the Investment Property Valuation Calculator. We hope you find it useful for all your commercial real estate needs!
To learn more about the team behind the IPV Calculator, visit RealLaunch.com.
MyNOI connects investors with the knowledge they need to make smart decisions and the right brokers to reach their goals. As a team we gather & write timely and salient articles for you to develop your expertise as a commercial real estate investor and broker.