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I have been introduced to this calculator from someone over in a Singaporean property related forum.
It seems pretty comprehensive. I plugged my details in for my current property and I have found it quite shocking how little my annualised return was.
It showed, as I was aware of already, that my property more or less breaks even year in terms of cash flow (I was aware of this already). Therefore the gains made would all be in the capital appreciation. This makes sense so far.
However, it showed that my average annualised return was 7.2% over 20 years. I put this into a compound interest calculator with the same amount as I would have used as a deposit and it doesn't achieve as high as a result. It's close but significantly different.
I have run similar calculations for 5,10 and 20 year periods now and I still can't understand where this difference is coming from.
Example of what I have entered,
Does anyone know of how we think this calculator is calculated its annualised ROI specifically? really would like to understand how this works properly as it's definitely something I want to be using going forward.
If not, if anyone has any other calculators to achieve the similar the thing, would you mind sharing? Would like to see the annualised return percentage in a graph where I can see the difference yearly.
Thanks in advance I have been racking my brains over this for hours now.
Your link is to a calculator for the US real estate market. The US market is very different to the UK market and some of the figures entered would not relate to a UK buy to let investment.
I am under the impression you will be able to enter the inputs in such a way that you can mimic the expenses of various countries. You have the freedom to set the closing tax rates to nothing for example.
are you aware of another way of achieving what I am trying to do here? would love to know how to work this stuff out myself
Hi, That particular calculator is american and not much use. try this onee
Thanks for the response. Your link doesn't work for some reason.
I know this calculator is American but with the variables entered we should be able to replicate a UK scenario as far as I'm aware.
Providing a growth calculator with annualised figures over a longer term forecast is an excellent idea, I hope you don't mind if I add that to my to-do list as an improvement for my calculator. :-)
With that in mind, it doesn't provide exactly what you're looking for at the moment, but my calculator is appropriate for the UK market and might still be interesting for you: https://app.patma.co.uk/prospector/prope...alculator/
There's also a slightly adapted version for existing properties (eg no stamp duty) here: https://app.patma.co.uk/prospector/remor...alculator/
Please send me a message/email/something if you'd like me to let you know when I've made a version with a longer term forecast.
Landlord | PaTMa Founder | Property and Tenant Manager software
Try our buy-to-let profit calculator or property browser extension for free.
Would like to see that.
I would be interested in building one if only I knew what the maths was behind it.
Year 1 it shows a cash flow of -$830 but what about the £4680 of appreciation? Where is that shown? Also it starts at the beginning of the year as opposed to the end like most other calculators.
$281753 (Value At Sale) minus $117000 (Mortgage) = $164753
$39,000 to $164753 over 20 years is an annualised return of 7.47% . I believe the first 10 years of having negative cash flow will be what has reduced this to 7.2% but they don't really show you this happening. The value at sale price doesn't really tell you how the negative cash flow is accounted for on the calculator. Would love to see how this thing works.
The strange thing is if you take the year on year cash flow into account with the equity you still don't meet the correct annualised ROI as a percentage. I have already emailed the guys who made the calculator as I am desperate to understand it!