Real Estate Calculator

Investing in real estate is a popular way to appreciate capital, but its real appreciation often remains hidden behind a series of costs, fees and windfalls. That is why the real estate calculator on smpl.cz was created — a tool that allows you to “reveal the truth” about an investment in an apartment, house or other real estate.

Why are ordinary calculations not enough?

Most calculations of the valuation of an investment with ongoing cash flows do not take into account when the flows occurred. We cannot take it as equivalent if the investment lasted 10 years and we in one case injected capital right from the start of the investment and in the other case only in year 9. On the contrary, if we get some profit from the investment in the first year, it is more valuable than if we get the same profit at the end of the investment after 10 years. Therefore, we must consider each cash flow precisely with its timing.

What calculator takes into account?

• Initial deposit (equity, mortgage amount, purchase price)
• Ongoing income (rent, annual rent increase, occupancy)
• Ongoing costs (servicing, repairs, monthly expenses, interest)
• Sale of property and related income
• Cash flow in individual years
• All costs in time, including vacancy and other risks

How calculator does appreciation count?

The resulting number “Nominal appreciation of equity (% p.a.)” is calculated using the IRR (Internal Rate of Return) method. The IRR shows what annual appreciation you really get when taking into account all deposits as well as income in real time. Money from you as well as earnings are discounted towards the beginning of the investment. The calculator calculates monthly cash flows, so the result is more accurate than in regular annual tables. We use numerical methods to calculate because there is no general formula for such complex equations as for the quadratic equation, for example.

What is the annual yield in calculator?

For real estate, like companies, we can compare price and annual earnings. For real estate, the annual return is calculated versus the P/E for stocks, which is the annual income from a property divided by the price of the property. In our calculator, we consider gross yield, and we take annual income as 12 * Monthly rent. So we calculate the annual yield as 12 Month Rental Price of the property. This figure is mostly in percentage terms, and it can be expected that this ratio will not change much and that there will be a similar annual return at the time of sale. Therefore, based on the annual yield, our calculator calculates the sale price of the property according to the rent in the year of sale. If you expect a change in the market annual return, you can overwrite the automatically filled annual return at the beginning of the investment in any way.

For whom is the calculator appropriate?

It is suitable for real estate investors, online entrepreneurs, equity investors, startups and individuals who want to really know the real value of their investment — without distortions and optimistic estimates. If you are dealing with asset structuring, tax optimization or legal risks when buying, renting or selling real estate, the smpl_ team offers a complete consulting service in the areas of law, tax and accounting.