Because you must ensure a good return on investment. Because renting your apartment should cost you money. Because keeping these variables in mind will help you plan your economy in the medium and long term. There are many reasons why calculating rental profitability is
And because it is VERY easy to do it with the rental housing profitability calculator that Housfy makes available to anyone who is interested.
Very easy. You only have to enter the data of your apartment and, above all, information related to the value for which you acquired the apartment, all the expenses related to the property and the price at which you want to rent the home.
From there, let the calculator do its job. You will soon see the net income you would receive per year and the profitability as a percentage.
Make the adjustments you see fit on the rental price to find a return that satisfies you. And ready!
The gross profitability of the rental is calculated, as Housfy publishes in its detailed guide, by dividing the annual income that the rental gives us by the price for which we bought the property.
This formula, which does not take into account expenses or other capital invested during the operation, will give us a very indicative figure for the performance of a rental apartment.
If we want to know more precisely how profitable it is to rent our apartment, we will have to calculate the net rental profitability.
The most advanced rental profitability tools use the net calculation. That is, they take into account the annual fixed or maintenance expenses (community, IBI, mortgage payments) for the dividend and the total value of the investment for the divisor.
For example, if we take out a mortgage to acquire the apartment, the amount paid up front will count as the investment value; If we had to do a renovation, we will have to add that expense.
The higher the profitability figure, the more profitable the operation will be.
To maximize the return on investment, the formula calls for reducing expenses and increasing profits. Although we know that this is sometimes difficult to consider, if in doubt it is advisable to contact a real estate expert who has detailed information about your neighborhood and can guide you.
Sometimes profitability isn't everything. Having guaranteed payment every month, a good relationship with your tenant and avoiding turnover can make your investment valuable in the long term.
