Months to pay back an ADU, rental unit or rental purchase from net rent, plus yearly cash flow and cash-on-cash return.
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This tool helps homeowners and small investors estimate how long it takes to recover the cost of building or buying an ADU or rental. It calculates your payback period and simple return based on your specific project costs and expected rent.
The calculator starts with your total project cost, which includes building or buying the unit. It then looks at your expected monthly rent. From that rent, it subtracts operating expenses, which default to 15 percent of the rent. It also accounts for vacancy, set at 5 percent by default. If you have a loan, you can add your monthly payment to the expenses. The tool uses these numbers to find your net monthly cash flow. It divides your total project cost by this net cash flow to find the months needed to pay back the investment. It also calculates your annual net cash flow and a simple cash-on-cost return. These figures are planning estimates only. They do not account for taxes, insurance changes, or market shifts. You should always confirm these numbers with a local professional before making financial decisions.
This is a basic measure of your yearly profit compared to your total investment. It does not include complex financial adjustments or taxes. It is a quick way to see if the project makes sense on paper.
This is a common starting point for planning purposes. It covers typical costs like maintenance and utilities. You should adjust this number to match your actual expected costs.
No, this tool focuses on rent, operating expenses, vacancy, and loan payments. You should add property taxes and insurance to your expenses for a fuller picture.
No, these are estimates for planning only. Real-world results depend on many factors like market conditions and maintenance issues. Always consult a local professional for accurate financial advice.
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