How I Kicked an Annual Property Operating Data (APOD) Up a Notch and Created an Annual Investment Summary

Hands down, perhaps the most popular and widely recognized real estate analysis report is an Annual Property Operating Data (or APOD).

For those of you less engaged in real estate investing, an APOD provides a "snapshot" of a rental property's income and operating expenses during the first twelve months of operation. It's popularity lies in the fact that it is easy to read and understand, and for the most part, gives an investor a good first-glance at the investment property's profitability.

Okay so why feel the necessity to take one of the darlings of investment analysis and kick it up a notch? Because I also wanted a "snapshot" of rental property that includes tax shelter consideration.

As useful as an annual property operating data report is, it does not account for income taxes and as a result shows the cash flows and returns only as they exist before the investor's tax liability (or savings). That shortcoming is what prompted the idea to create (later called) the Annual Investment Summary; not as a replacement to the APOD, but as a supplement.

All the work was done on a MS Excel spreadsheet program and essentially consisted of creating three components: (1) the forms to collect the data, (2) the correct formulas to make the tax calculations, and (3) the report itself.

For the most part, this was fairly straightforward except for the report. Since my intent was to include the data on a single page similar to the annual property operating data, the challenge was deciding how to include the tax results concisely enough to fit.

To do this, I took the APOD I created several years ago for my own real estate analysis and continued to reformat it until I achieved my desired result (which I shamelessly add, turned out great).

I've included a screen shot of both my standard annual property operating data and annual investment summary so you can compare and see how it turned out.

James Kobzeff is the developer of ProAPOD Real Estate Investment Software and provides the Annual Investment Summary in his real estate investor software solution.