Figure out what the principal, interest, insurance, maintenance, taxes, etc. would be on that property (worse case), subtract out what you pay for rent, and try to save at least that every month ... this will not only help build your personal finance skills, but will also simulate what your finances would look like after you purchase the property ... if you are late or short even 1 day or dollar or don't like how your life is during that simulation, then you won't like it after your purchase ... you'll need to lower the simulated expenses until you are happy with it ... from that you will know how expensive a property you personally can comfortably afford and save up a down payment for it.

They let you simulate how your credit score is affected if you make certain changes - close a card, pay down debt, etc.

However, I would jump to something that is geared towards your business like Buildium, that way your doing accounting correct, and you also getting everything else everyone is trying to simulate with spread sheets.

Anybody on here ever used Monte Carlo simulations or partial stochastic differential equations to determine things like purchase price, optimal holding period, rent increases.

Anybody on here ever used Monte Carlo simulations or partial stochastic differential equations to determine things like purchase price, optimal holding period, rent increases.

But still left confused which way to go.I ran a simulated property both ways and it seemed like a wash....not sure I caught all the details though.

Run a simulation of a 30 year mortgage amortization schedule: the first several years are almost ALL interest, taxes, insurance, etc... with very little principal pay-down.

Get rid of the carpet entirely and put down simulated wood sheet vinyl.

@Rahul Handa the 4% rule of thumb is based on the Monte Carlo simulation and I think most “experts” are reducing the number down to 3%.

@Justin Scott just use a stochastic partial differential equation and then validate it with a Monte Carlo simulation to make sure you modeled it correctly