I am starting to deposit in the unit office building regulating the loan.
Is it the noi-annual debt service-annual debt payments-the annual loan paybacks-income taxes?
If this isn’t right, afterwards greatfully yield the correct approach of last my tangible annual distinction after taxes or pre-tax.
HOW DO I CALCULATE A APARTMENT BUILDING INVESTMENT CASH FLOW AFTER TAXES OR BEFORE TAXES?
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You need to calculate the after-tax rental income first, then after tax cash flow second.
First after-tax income from the property.
Income
a) gross income from the rentals
Expenses
b) mortgage interest
c) depreciation (assume 80% of the purchase price is depreciable building, thus annual depreciation is purchase price * 80% / 27.5 years or about 2.9% of the purchase price)
d) real estate taxes
e) rent loss due to vacancy, tenant
f) management fee
g) maintenance fee
h) insurance
Income – expense would give you roughtly taxable rental income from the property.
Assuming the rental bldg generates a (paper) loss, you can apply it towards your personal ordinary income and use it to reduce your ordinary income.
If you show a rental profit, then you would have to pay at your marginal tax rate.
Cash Flow:
Annual Rental income – annual mortgage payment -/+ tax liability or tax benefit from owning this property.