METHODOLOGY

Homey estimates the income, expenses and cash flow of a given property based on the following third party sources and key assumptions:

Property Description: listing information taken from publicly available data; property price set to Zillow Zestimate as a starting point. Sources: Zillow and other real estate platforms.

Mortgage Estimates: assumes property is purchased using a 30-year mortgage, with a 25% down payment at a 4.65% fixed
interest rate. Source: non-occupancy mortgage rate via Free and Clear. 

Buyer and Seller Fees/Closing Costs: assumes Buyer fees equal to 2.1% of purchase price and Seller fees/closing costs
equal to 6.0% of purchase price. Source: Smart Asset; Bankrate.
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Monthly Rental: set to the Rent Zestimate as a starting point. Sources: Zillow.

Rental Expenses:

• Vacancy Allowance: assumed to be equal to 5.0% of rent. Source: BiggerPockets.
• Property Taxes: based on the county average effective property tax rate. Sources: SmartAsset.com.
• Homeowners Insurance: based on value-adjusted state-wide average . Source: Insurance.com.
• Property Mgmt: equal to 8% of rent. Source: BiggerPockets.
• Repairs and Maintenance: equal to $1 per square foot. Source: Real Property Management.
• Capitalized Expenditures (CapEx): equal to 5% of rent. Source: BiggerPockets.
• Leasing Fees: equal to half month's rent every 2 years (2.5% of rent). Source: BiggerPockets.

Appreciation Rate: annual property appreciation is based on 1 year appreciation forecasts from Zillow. Source: Zillow.

​Rent Increase: rent is assumed to increase by 2.6% annually. Source: Apartment List.