Real Estate Investment Software

Learning how to depreciate rental property is a vital skill to have for any landlord or real estate investor. There are two depreciation methods available–the straight line method, and the double declining balance method–for an investor to choose between. Since every property paired with a real estate investor is financially unique, the investor should run the calculation both ways to find out which way works best for their situation. The current insured replacement cost will help an investor obtain the data values needed to run the calculation. The land value, structure value, and fixture values are all used when calculating depreciation–regardless of the depreciation method being used. The real estate investor would also need to get the state and federal tax rates as well. Once this information has been obtained, the calculations can be performed.

Depreciation formula for the straight line method:
Current Value – Salvage Value / Years left of productive life

Depreciation formula for the double declining balance method:
(Current Value - Salvage Value) * (2 * 100% / Years left of productive life)

Learning how to calculate the NPV–Net Present Value–is one of many valuable skills to have if you want to invest in real estate. The NPV helps a real estate investor analyze a properties profitability. Although, many investors consider the NPV to be unreliable. The NPV relies on projected future cash inflows which is impossible to accurately forecast. Even when an investor realizes the NPV’ reliability, it is still calculated because it provides a guess estimate. It would be beneficial to be as realistic as possible when inputting future cash flow values. A good way to do this would be by guessing a high and low realistic amounts, and using the number between the two. However, a good way to ensure your being realistic would be by keeping the high and low amounts as close together as possible.

I suggest using the built in formula in Excel, or other popular spreadsheet programs to calculate the NPV. Here is the formula used for calculating the NPV: =NPV(discount rate, cash flow values).

Learning how to calculate the ROI–Return On Investment–is another important skill to have if you want to invest in real estate. I suggest using the built in formula in Excel, or other popular spreadsheet programs. But if you want to know how to do it yourself, read on.

Welcome to Real Estate Investment Software–where you can learn about real estate investing and all the software tools available–and find resources and contacts in the real estate business.

Learning the core concepts for investing in real estate is very important to the success of your future. Knowing how to perform and understand the calculations involved in any real estate investment transaction is vital as well. Once you’ve learned these core concepts and calculations, it’s time to move on to professional software to help you fully analyze a property. You should know when to buy, when to sell, and when to walk away. You don’t have to shoot in the dark any longer.