Real Estate Investment Analysis - Cash Flow Calculation

 

Notes:

• What problem does it solve?
  This code calculates the monthly and yearly cash flow for a real estate investment based on income and expenses.

• How can businesses or users benefit from customizing the code?
  Businesses can use it to quickly assess the potential profitability of different properties. Users can adapt the code for various property types or geographic regions by adjusting inputs.

• How can businesses or users adopt the solution further, if needed?
  Users can integrate this into property management software or combine it with other financial models to provide more detailed investment analysis.

Actual Python Code:

class RealEstateInvestment:

    def __init__(self, rent_income, mortgage, property_tax, insurance, maintenance_costs, vacancy_rate):

        self.rent_income = rent_income

        self.mortgage = mortgage

        self.property_tax = property_tax

        self.insurance = insurance

        self.maintenance_costs = maintenance_costs

        self.vacancy_rate = vacancy_rate

        

    def monthly_cash_flow(self):

        # Calculate income after vacancy rate

        adjusted_rent_income = self.rent_income * (1 - self.vacancy_rate)

        # Monthly expenses (mortgage + taxes + insurance + maintenance)

        total_expenses = self.mortgage + self.property_tax / 12 + self.insurance / 12 + self.maintenance_costs / 12

        # Monthly cash flow

        return adjusted_rent_income - total_expenses

    

    def yearly_cash_flow(self):

        return self.monthly_cash_flow() * 12

# Example usage

investment = RealEstateInvestment(rent_income=3000, mortgage=1500, property_tax=2400, 

                                  insurance=1200, maintenance_costs=200, vacancy_rate=0.05)

print(f"Monthly Cash Flow: ${investment.monthly_cash_flow():.2f}")

print(f"Yearly Cash Flow: ${investment.yearly_cash_flow():.2f}")