Retirement Property Calculator

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How to Calculate Retirement Property Metrics

Here are the primary calculations involved:

  1. Affordability: Affordability (%)=(Available Savings+Monthly Income Allocated for PropertyProperty Price)×100\text{Affordability (\%)} = \left( \frac{\text{Available Savings} + \text{Monthly Income Allocated for Property}}{\text{Property Price}} \right) \times 100
  2. Rental Income: Rental Income=Monthly Rent×12\text{Rental Income} = \text{Monthly Rent} \times 12
  3. Net Retirement Property Cost: Net Cost=Property Price+Annual Maintenance CostsRental Income\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: Affordability (%)=(50000+(2000×12)250000)×100=136%\text{Affordability (\%)} = \left( \frac{50000 + (2000 \times 12)}{250000} \right) \times 100 = 136 \%
  2. Rental Income: Rental Income=1200×10=12,000USD/year\text{Rental Income} = 1200 \times 10 = 12,000 \, \text{USD/year}
  3. Net Cost: Net Cost=250000+300012000=241,000USD\text{Net Cost} = 250000 + 3000 - 12000 = 241,000 \, \text{USD} After rental income, the effective cost of owning the property is reduced.