Buying real estate overseas is your number-one opportunity and best possible strategy for building a diversified portfolio of hard assets to generate cash flow to fund the lifestyle, the retirement, and the legacy you want.

The key is buying right. To do that, you must be able to project monthly cash flow and net annual yield reliably before committing to a purchase.

Our spreadsheet below—which is one we use ourselves when considering an investment overseas—will help you do that, while also allowing you to compare the return from renting a property short- vesus long-term.

You fill in the cells highlighted in green. Everything else will be calculated for you. (You’ll need to hit the calculate button for each section as you go through and again if you make any changes.)

Specifically, here’s how to approach this. Start with the purchase figures—the cost of the property plus the cost of furniture (if necessary) less the amount being borrowed (assuming a mortgage or some other form of financing)… as follows:

Input A: Purchase Price (including all closing costs)

Input B: Furniture Cost (if applicable)

Input C: Financing (amount of mortgage, if applicable… if you’re paying all cash, do not enter anything into this field)

These three inputs (A, B, and C) will give you your Net Cash Investment (Calculation A).

Next project your income, based on projected rental and occupancy rates, figured first if the property is rented long-term and then if the property is rented short-term… as follows:

Input D: Monthly Rental Income Renting Long-Term

Input E: Daily Rental Income Renting Short-Term

Input F: Occupancy Rate Long-Term

Input G: Occupancy Rate Short-Term

Inputs D and F will give you your Net Monthly Cash Flow if renting Long-Term (Calculation B).

Inputs E and G will give you your Net Monthly Cash Flow if renting Short-Term (Calculation C).

Now figure your expenses, because the only yield figure that matters is net. Gross projections are misleading and irrelevant. Project your total costs of operating the rental as follows:

Input H: Cost of Rental Management Renting Long-Term

Input I: Cost of Rental Management Renting Short-Term

Input J: HOA Expense Renting Long-Term (same as Input K)

Input K: HOA Expense Renting Short-Term (same as Input J)

Input L: Utilities Renting Short-Term

Inputs H and J will give you your Total Expenses Renting Long-Term (Calculation D).

Inputs I, K, and L will give you your Total Expenses Renting Short-Term (Calculation E).

The spreadsheet will calculate your Total Expenses, Net Monthly Income, and Annual Income for you, both for renting Long-Term and Short-Term.

Now it’s time to calculate your Net Yield, renting Long-Term versus renting Short-Term. You should process these projections based both on the Purchase Price of the property and the Current Value of the property. The spreadsheet will do the math to fill in the Purchase Price for you, based on your Inputs A and B, and then your Purchase Price Net Yield.

However, the Current Value Net Yield calculation cell is green (Input M). You should fill this in based on your estimate of the current value of your property every time you return to this spreadsheet. The variables considered here will vary over time, so you should keep this link handy so you can refigure your Yield projections based as necessary.

Finally, you should look at your Cash-on-Cash Yield renting Long-Term versus Renting Short-Term. This requires you to enter your Mortgage Payment (Input N). The spreadsheet will do the rest, calculating your Monthly Net Cash Flow, your annual Net Cash Flow, and your Cash-on-Cash Yield renting Long-Term versus Renting Short-Term.