This Investment Analysis below is primarily used for long term rentals;
for Vacation Rental Property Analysis, click here to download an editable xls spreadsheet
Assumptions
- There will be a constant appreciation rate during the holding period.
- Rental income and expenses will remain constant during holding period.
- Investor wants to maximize wealth and will reinvest positive cash flows.
- If negative cash flows result, an interest charge will be made at the same savings rate to offset the opportunity cost of being able to use that money elsewhere.
- The marginal tax rate of the investor will remain constant during the holding period.
- The marginal tax rate of the investor is used to determine the impact of this investment regardless of what else the investor may do in the year of sale.
- The investor is able to apply the annual tax savings generated against that year’s tax liability.
- The investor will pay federal taxes for long term capital gains and recapture of cost recovery in the year of sale.
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