I created this excel spreadsheet to help evaluate a rental property. This rental property evaluator will help you determine the monthly income you will receive as well as how much you will earn over a period of 30 years. I tried to make it pretty simple to use. Just fill in all the blue-colored cells. I know USAA has a pretty good estimator that will give you quotes on mortgages with estimated tax and insurance.
I like to use this to look at buying a duplex or a triplex and compare living in one unit while renting out the other units to living on post. I input my BAH as my rent paid and then add in the possible rental rate for each additional unit. The monthly income is then how much more money I will have each month compared to living on post where I don’t get any of my BAH.
You can also use this for rental properties that you do not intend to live in or for single-family properties that you want to live in without being a landlord.
The information on the right calculates a number of items for each year after the purchase of the home based on the appreciation rate and the rent increase rate you input. It will tell you how much you owe on the property each year, how much equity you have earned, how much total rents you have earned, and how much earned from appreciation. The total return after 30 years that includes your equity and total net income from rents.
Example: Purchased a two-unit home for $120,000 using the VA loan. The VA funding fee of 2.15% is added to the mortgage for a total of $122,580. Since this was a VA loan, I did not need to put anything down but did have $6131 in closing costs. So my total initial investment is $6131. I live in one unit with a BAH of $1200 a month and rent the other unit out for $800 a month.
I assume my annual operating expenses will be $5440 for water, snow removal, and general maintenance. I also assume that the one unit will be vacant for two months out of the year as tenants move out and new ones move in.
Based on this example, my monthly net income will be $843 a month. That is $843 more money in my pocket than if I lived on post.
With a 1% appreciation rate and 0 rental increase over the years, I will have earned $461,889 in equity from using the tenants and my BAH to pay off the mortgage, appreciation of the home at 1%, and the net income after expenses from the rents. If I do not count my BAH, I will have only invested $6131.00.
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