How to calculate the rate of return for rental property.?

by admin on February 7, 2010

If I know what I paid, and the value currently, and I know how much profit I recieved per year (which in this case is defined as the distribution of income after expenses- once per year around the first of the year), how can I factor these in, to come up with a rate of return? How do I factor in that some of the distributions were tax-free, and that a portion were not, and these portions are changing from year to year.
Does somebody have an excel spreadsheet that has the fromulas plugged in to do this?

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{ 3 comments… read them below or add one }

Richard B February 7, 2010 at 1:18 am

7% yearly rental income on the value of the house.

dobrinski2003 February 7, 2010 at 1:46 am

Add up your rental income, then subtract all your expenses and divide it by the amount of your down payment. Thats a quick way to do it.

XLMan February 7, 2010 at 2:30 am

You have alot of Finance functions in
Insert > Function > finance category
These are powerful functions, you should find what you need there

good luck

Read my profile, I am XLMan

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