Retirement Property Calculator

How to Calculate Retirement Property Metrics

Here are the primary calculations involved:

1. Affordability: $\text{Affordability (\%)} = \left( \frac{\text{Available Savings} + \text{Monthly Income Allocated for Property}}{\text{Property Price}} \right) \times 100$
2. Rental Income: $\text{Rental Income} = \text{Monthly Rent} \times 12$
3. Net Retirement Property Cost: $\text{Net Cost} = \text{Property Price} + \text{Annual Maintenance Costs} - \text{Rental Income}$

Example:

You are considering purchasing a retirement property priced at $250,000. You plan to rent it out for part of the year and expect the following:

• Savings: $50,000
• Monthly income allocated for property expenses: $2,000
• Expected monthly rent: $1,200 (for 10 months/year)
• Annual maintenance costs: $3,000

1. Affordability: $\text{Affordability (\%)} = \left( \frac{50000 + (2000 \times 12)}{250000} \right) \times 100 = 136 \%$
2. Rental Income: $\text{Rental Income} = 1200 \times 10 = 12,000 \, \text{USD/year}$
3. Net Cost: $\text{Net Cost} = 250000 + 3000 - 12000 = 241,000 \, \text{USD}$ After rental income, the effective cost of owning the property is reduced.