Methodology
This page explains, in plain language, how MB CALC models a property. MB CALC does not predict the future. It measures the consequences of assumptions.
Rental cash flow
Gross scheduled rent, minus vacancy, minus maintenance, minus property management, minus mortgage principal & interest, minus property taxes, minus homeowners insurance, minus HOA. The percentages for vacancy, maintenance, and management come from your assumptions — they are not fixed.
The Reserve Requirement
MB CALC requires the greater of six months of gross monthly rent, or six months × 1.33 × monthly PITI + HOA. The results show which side currently controls. The requirement is recalculated over time as rent and costs change.
Owner Support
Owner Support is the modeled negative rental cash flow the owner covers from outside the property. It is tracked per year and cumulatively. Money contributed to fund required reserves is shown separately, so you can see where the money is going.
Turning Point
The first modeled point when rental cash flow is at least zero and required reserves are fully funded. Appreciation cannot cause a Turning Point. Equity cannot cause a Turning Point. Rent merely exceeding the mortgage is not enough.
Production Phase and reinvestment
After the Turning Point, positive cash flow rebuilds required reserves first. Anything left over is modeled as invested, with contributions tracked separately from modeled investment growth. The default modeled return is 9% annually and is editable; it is not a guarantee.
Amortization, appreciation, and equity
Mortgage amortization is modeled on a monthly interval and summarized annually; if the loan is paid off mid-year, principal & interest stop at that point. Property value grows with the appreciation assumption. Equity is property value minus mortgage balance — it is never treated as spendable cash flow.
Payback Point
The first point when cumulative positive property production after the Turning Point equals the cumulative rental operating Owner Support contributed before it. Reserve funding stays separately identified.
Future dollars and today’s dollars
Future nominal amounts are converted to present purchasing power by dividing by (1 + inflation) raised to the number of years. A DOLLAR VIEW toggle applies this to the major outputs. Long-range figures are shown with appropriate rounding rather than false precision.
Opportunity cost
If keeping a property requires Owner Support before the Turning Point, the same money could have been used elsewhere. Where modeled, comparisons respect the actual timing of contributions rather than pretending the whole amount was available on day one.