Please review my ROI calculation

[Santosh P.]

Hello Friends,

I wanted to find out ROI on my investment and I have come up with basic calculator. I wanted someone to review my personalized calculator and suggest any edits.

Monthly rent (and other additional perks)

(less) vacancy loss

Gross monthly operating income (A)

(less) Monthly operating expenses (B)

• Property management
• Property taxes
• Utilities
• HOA (if applicable)
• Repairs and maintenance

Net Operating Income C = A-B

Net Annual Operating Income D = C * 12

Cap rate = Net Annual Operating Income / Purchase price

Down Payment = (This is my own investment)

Monthly Mortgage (Principal)

Monthly Mortgage (Interest)

Cash Flow Annual = (Gross Monthly operating income – Monthly Operating expenses – Monthly Mortgage (Principal + Interest) ) * 12

Cash on Cash Return = Cash flow Annual / Down payment

Taxable deduction

• From Interest deduction
• From operating expense deduction
• From ownership expense deduction(Depeciation) = Purchase price / 27.5

Saved in Taxes = Taxable deduction * (your income tax bracket)

Increased Equity = Annual Monthly mortgage (Principal component)

Total returns = Annual Cash flow + Saved in Taxes + Increased Equity

ROI = Total / Returns Down payment

What typical ROI is reasonable to expect from 2-4 unit multifamily rental unit?

Thanks

Santosh