Idaho Investment Property — Ada County
Rental Property Financial Model
Rick & Renée · Primary residence: Mukilteo, WA · Tenant: Gianna, Jody & 3 children
Inputs — adjust me
Home purchase price
$325,000
$275K$400K
Mortgage type
Interest rate
6.75%
5.50%8.50%
ARM fixed period
Fixed 7 yrs · then annual adjustments · 30-yr amortization
Jody gross annual income
$50,000 /yr
$35K$99K
Gianna childcare income
$600 /mo
$0$4,000/mo
Annual maintenance reserve
$2,400/yr ($200/mo)
$500/yr$6,000/yr
Roof · HVAC · water heater · appliances · paint · repairs. Suggested: $2,400–3,000/yr for a $300–350K home.
Your return on cash deployed
0.00% on down + closing
0% (break-even)5%
+$0/mo added to rent
⚠ Below 4.08% AFR — OK in rental structure; only an issue if structured as a loan.
Capital gains — withdrawal
Cost basis (% of current value)
40% basis / 60% gain
10% (mostly gain)95%
Account type
Hold period
Down payment
Fixed assumptions
Depreciation: 27.5 yrs · Basis: 75% of price
Tenant: 22% fed + 5.695% ID + 7.65% FICA
Your rate: 32% + 3.8% NIIT + 5.695% ID = 41.5%
Closing costs: 3% · Prop tax: 0.7% · Insurance: $1,500/yr
Total cash at close
Required monthly rent
Annual rental tax owed
$0
Mortgage interest shelters income
True family gift
closing + depr. recapture
Upfront cash
Purchase price
Down payment
Closing costs (3%)
Total cash deployed
Mortgage
Portfolio preserved vs all-cash
Monthly rent build-up
Mortgage P&I
Property taxes (est.)
Insurance
Maintenance reserve
Return on cash deployed
Required monthly rent
Your net cash flow$0 / mo
Mortgage details
Type
Rate
Term / amortization
Their affordability
Jody gross income
Est. take-home / mo
Gianna childcare income
Total household income / mo
Remaining after rent
Rent as % of income
0%30%50%75%+
Schedule E (annual)
Gross rental income
Less: mortgage interest
Less: tax + ins + depreciation
Less: maintenance (deductible)
Return income component
Net Schedule E income / (loss)
Annual rental tax$0
All-cash alternative tax
Annual tax savings (mortgage)
Buyout analysis
Sale price (original cost)
Mortgage balance remaining
Net proceeds to you
Original down payment
Equity built (amortization)
True economic cost
Cash deployed at close
Net recovered at buyout
Depreciation recapture @25%
Net economic result
Family gift breakdown
Closing costs
Depreciation recapture
Total embedded gift
Planning estimates only. Consult Idaho attorney, CPA (WA/ID), and financial advisor. Maintenance reserve is a planning figure — actual costs vary.
Year 1 Capital Gains Tax — Mortgage vs All-Cash Withdrawal
ALL-CASH — Full withdrawal
Amount withdrawn
Cost basis
Taxable gain / ordinary income
Federal tax
WA capital gains excise (7%)
Total Year 1 withdrawal tax
MORTGAGE — Down + closing only
Amount withdrawn
Cost basis
Taxable gain / ordinary income
Federal tax
WA capital gains excise (7%)
Total Year 1 withdrawal tax
Tax savings — Mortgage vs All-Cash
Year 1 withdrawal tax saved
Annual rental tax saved
Total tax saved over hold period
Portfolio still earning on
Gianna & Jody — Savings Required to Purchase
Down payment % at purchase
10% down
5% (FHA)25%
Expected mortgage rate at buyout
7.00%
5.50%9.00%
Years to save / buyout
5 years
3 yrs7 yrs
Savings target
Purchase price (original cost)
Down payment required
Est. closing costs (3%)
Total cash needed
Years to save
Required monthly savings
Their mortgage at buyout
Loan amount
Est. interest rate
Monthly P&I
Monthly property taxes
Monthly insurance
Total monthly housing cost
Feasibility check
Total household income / mo
Less: monthly savings
Remaining for living expenses
Income needed to qualify (28%)
Housing affordability at buyout