With an median home prices starting at $1 million dollars, investing in Los Gatos Real Estate will require decent amount of change. But it appears that you will also need add a Smart Phone to this requirements as well.
This Smart Phone app is called Property Evaluator which allows you to create very detailed analysis of the property before you make purchase decisions.
This app offers Purchase Analysis in addition to Buy and Hold Strategy after the users enters the information about a specific property. The Free version of the Property Evalutor offers users up to 3 Expense categories to add which might not be sufficient if your holding period is going to be longer than 5 years. But for a quick analysis is sufficient start.
The category of expense for the Free Version are:
1) Cleaning & Maintenance: The app’s default value for cleaning and maintenance is 0.8% of the purchase price. These values can be entered per month or per year.
2) Insurance: Default value of 0.5% of purchase price. You will need to adjust this since with an average price of $1M, you will get very high insurance premium costs which would impact your ROI analysis.
3) Taxes : The default value is set to 1% of purchase price which you can adjust based on the tax rates which are at 1.5% in Santa Clara.
The Assumption Sections has the following information which can be modified:
1) Appreciation Rate: 3%
2) Vacancy Rate: 8%
3) Income Inflation: 3% (We had to change this one since incomes have been stagnant for the past 10 years)
4) Expense Inflation: 3%
5) LTV for Refinance: 70%
6) Closing Costs:
8) Area Units: Square Feet
9) Compounding Period : Monthly
This FREE app developed by Utah based investor turned entrepreneur Joel Grasmeyer. The iPad version of the app was updated in July 11, 2013 which is good good indicator of the developers commitment to add new features.
It was neat to enter a test property in Los Gatos for a purchase price of $1,000,000 with an equity of $250,000. The app offers 1st and 2nd mortgage input that users can add for the purchase of purchase analysis.
The best part of app is the Buy and Hold Projections that in Year 20 with a projected Rental Income of $5,000 per month from this San Jose home, the market value of the property would be $2,257,639 offering the buyer an equity of $1,784,987. This is valuable information to have on each property for an investor who is interesting in Holding a property for rental income.
Have you used this app!? Let us know what you think?