Cash on Cash ROI calculation on existing homestead

[David Luna]

I may purchase another home this year for me and my family to live in and convert current single family home (purchased 8 years ago) into my first rental. Normally for the Cash on Cash calculation, I would need to determine how much my down payment, closing costs & rehab costs were to calculate my total investment. My question: is this something I still need to calculate for my situation? I mean would I need to go back 8 years and remember how much my down payment was along with closing costs at that time? In addition, would I need to calculate How much principal payments i have paid over the last 8 years and add that to my down payment and closing costs in order to calculate my total investment to date?

[Andrew Kerr]

@David Luna - run your current property thru the BP rental calculator. And use your current equity for the down payment. If the house is worth $200k and you owe $150k, run the calculator with a purchase price of $200k with a $50k down payment. See how it comes out. Would it make sense with current conditions? This can give you some comparison?

Also, run a manual calculation with your current mortgage payment, and your current equity as the cash in to get a ROI.

What I would want to see is, 1) does my property cash flow as is then 2) could the equity in my property get me a better return elsewhere.