Line Item Amount
Gross Potential Rent (12 ร $2,589) $31,068.00
Less: Vacancy (5% of $31,068) $1,553.40
Effective Gross Income ($31,068 – $1,553.40) $29,514.60
Operating Expenses
Management Fee (8% of $31,068) $2,485.44
Property Taxes ($1,092) $1,092.00
Repairs / Maintenance ($0 assumed) $0.00
Insurance, Utilities, etc. ($1,000) $1,000.00
Total Operating Expenses ($2,485.44 + $1,092 + $0 + $1,000) $4,577.44
Net Operating Income (NOI) ($29,514.60 – $4,577.44) $24,937.16
Debt Service (Mortgage P&I)
Loan amount (Purchase Price – Down Payment = $145,500 – $29,100) $116,400.00
Interest rate 8.00%
Term 30 years
Annual Mortgage Payment $10,249.22
Cash Flow Before Taxes / After Debt ($24,937.16 – $10,249.22) -$312.06
Depreciation Deduction
Depreciable basis (80% of $145,500) $116,400.00
Depreciation period (27.5 yrs) 27.5
Annual depreciation ($116,400 รท 27.5) $4,232.73
Annual Appreciation (3% of $145,500) $4,365.00
Total Return (Year 1) (Cash Flow + Depreciation + Appreciation) $8,285.66
Cash Invested (Down Payment) $29,100.00
Cash-on-Cash Return (Year-1 CFBT รท Cash Invested) -1.07%
Total Return Rate (Total Return รท Cash Invested) 28.47%
