proapod®

Real Estate Investment Softw are

www.proapod.com

Annual Property Operating Data (APOD)

James R Kobzeff

An APOD is one of the most popular reports in real estate investing but rarely understood by those
just beginning to work with rental income properties.

The APOD

APOD is simply an acronym for Annual Property Operating Data and serves as the real estate
equivalent of an annual income and expense statement. Consider it a snapshot of a property’s
annual income and expenses if it helps plant the idea.

A well-constructed APOD is best for comprehension, but in truth, it can be written on a napkin. It
does not do much for your image to present your customer with a napkin, but the emphasis is on
correct numbers, not style. Moreover, note the word annual. An APOD annualizes its numbers; it
does not concern monthly numbers.

How to Construct an APOD

1. Show the annual income derived from rents. Take the sum of all monthly rents as if the units
were 100% occupied (i.e., project a rent amount for vacant units) and then multiply by twelve to
annualize it. Label it Gross Scheduled Income (GSI).

2. Enter an annual amount for vacancy and credit loss and deduct it from the gross scheduled
income. Label the result Effective Gross Income (EGI).

3. Enter an annual amount for income generated from other sources associated with the property
(i.e., laundry income) and add it to the effective gross income. Label the result Gross Operating
Income (GOI).

4. Itemize the property’s annual operating expenses and total it. This should include property
taxes, property insurance, utilities, trash, repairs and maintenance, and other applicable expenses
(i.e., property management, advertising, landscaping, etc.). Label the result Annual Operating
Expenses.

5. Deduct the total annual operating expenses from the gross operating income and label the result
Net Operating Income (NOI).

6. Calculate the annual amount paid for debt service and deduct it from the net operating income.
Label the result Cash Flow Before Taxes (CFBT).

That is all there is. You have just constructed an APOD.

For good measure, you might want to add a computation for cap rate, gross rent multiplier, and
cash on cash return. This is not necessary, but it does create an APOD that will make you proud to
present to customers and lenders. That is, of course, if you did it on a spreadsheet or similar
software program and not on a napkin.

ProAPOD® Real Estate Investment Software generates an APOD along with a wide-range of other
reports you can create in minutes. Just fill in the forms and print. Cash flow, rates of return, and
profitability measures are calculated for you automatically, and in real time.

About The Author

James R. Kobzeff is the developer of ProAPOD® Real Estate Investment Software, Real Estate
Investor Software, and Mortgage-Financial Calculator Software. www.proapod.com

James R. Kobzeff
Phone: 503-949-9034
Email: jamesrk@proapod.com
Web: http://www.proapod.com
©2008 James R Kobzeff. All rights reserved.