Example Rental ProForma Property Report

Analyzing a Rental Property Deal

Buying a rental property is one of the most popular modes of investment. Despite the ease of investment in the stock market and several alternate investment options available for people who need to grow their wealth or supplement their income, rental properties haven’t lost their ground. They are especially valued for their cash flow consistency.

Like any other investment, you need to evaluate a rental property before investing. For that, you have to assess the property from a real estate perspective, and from a financial asset perspective. It's not a gargantuan task for seasoned investors who have a lot of experience in buying and managing investment properties. But for people unfamiliar with the real estate market, it can be a difficult task to master. And it needs to be done right, or the investment can turn into a liability.

But it doesn’t have to be this way.

With the right tools and guidance, crunching the numbers for a rental property can get easier, and significantly more efficient. One of these tools is a property investment analysis report for a rental property. 

Investment Analysis Report – How Does It Help Investors

Analyzing a rental property deal isn’t as straight forward as many investors initially think it is. For a rudimentary cost-benefit analysis of a rental property, you may only need three variables: Gross rental income, mortgage payment, and down payment (initial investment). But the actual analysis is a bit more complicated.

The price of the property, and consequently, your mortgage isn’t the only big number you have to think about. The ARV (After Repair Value) is also equally important. For an accurate ARV assessment, you have to break down the rehab cost into its individual elements. The more conservative you are about your rehab cost assessment, the better. Then there is your cap rate. On its own, the number isn't as helpful as it's when compared against the cap rate of comparable units in the market. 

A property report covers all these. It also covers the cost of your financing, repairs, repayment, and the gross returns you might expect from your rental property. Since this is a buy and hold type of investment, as an investor, you should have a realistic idea about your cash flows. And that includes all the expenses that are going back into the property.

What many investors don’t understand is that even some viable rental investments don't start paying off right away. Or, more accurately, they don't start generating a positive cash flow. You may have to pay for a few expenses out of your pocket. But if the long term projections and rental generation scope of the property are strong, then it may still be a good investment.

A property investment analysis report by Ocean County Investments covers all these variables, calculations, and projections. Two heads are better than one, and we have more than two heads. When we prepare an analysis report about a property, it's backed by our exposure to the current market, our collective experience of analyzing hundreds of such properties, and putting thousands of such deals through.

Whether you want help with your own analysis, you need to learn the basics on how to run numbers on investment property, or you are a seasoned investor who simply wants a different perspective on property analysis, our property investment analysis reports will have something for everyone.