Adjusted Funds from Operations (AFFO)
REIT Performance Metrics
What Is an AFFO Calculator?
An AFFO calculator is a financial tool that estimates a REIT’s Adjusted Funds From Operations from user-entered accounting values. It first calculates Funds From Operations, or FFO, then adjusts that amount for recurring property costs and rent-related adjustments. The result gives a clearer view of cash flow from operations than net income alone.
The calculator solves a common REIT analysis problem: net income can be affected by non-cash depreciation and one-time property sale gains. By adjusting for those items, the tool estimates FFO and AFFO. If shares outstanding are entered, it also displays AFFO per share and FFO per share.
An AFFO calculator estimates a REIT’s recurring operating cash flow by starting with net income, adding depreciation and amortization, subtracting property sale gains, and deducting recurring capital expenditures, straight-line rent adjustments, maintenance, and leasing commissions. It helps investors review REIT performance using cash-flow-based metrics.
How the AFFO Formula Works
This calculator uses two main calculations. First, it calculates Funds From Operations. Then it adjusts FFO to estimate Adjusted Funds From Operations. The tool also calculates per-share values only when the shares outstanding field is greater than zero.
Net income is the starting profit figure entered by the user. Depreciation and amortization are added back because they are non-cash accounting expenses. Net gains on property sales are subtracted from FFO. Recurring capital expenditures, straight-line rent adjustments, and routine maintenance and leasing commissions are then deducted from FFO to estimate AFFO.
For example, assume a REIT has $10,000,000 in net income, $4,000,000 in depreciation and amortization, $1,000,000 in net gains on property sales, $1,500,000 in recurring capital expenditures, $200,000 in straight-line rent adjustments, and $300,000 in routine maintenance and leasing commissions.
FFO equals $10,000,000 + $4,000,000 – $1,000,000, which gives $13,000,000. AFFO equals $13,000,000 – $1,500,000 – $200,000 – $300,000, which gives $11,000,000. If shares outstanding are 5,000,000, AFFO per share equals $2.20, and FFO per share equals $2.60.
The calculator requires net income and depreciation and amortization before it shows results. Other fields use a default value of zero when left blank. Shares outstanding are optional. If shares are blank or zero, the per-share section stays hidden. Results are formatted as U.S. dollar amounts with two decimal places, including negative values when applicable.
How to Use the AFFO Calculator: Step by Step
- Enter the REIT’s net income in dollars. This field is required before the calculator will show results.
- Enter depreciation and amortization in dollars. This field is also required and is added back in the FFO calculation.
- Enter net gains on property sales, if any. If this field is left blank, the calculator treats it as zero.
- Enter recurring capital expenditures. This amount is deducted from FFO to estimate AFFO.
- Enter straight-line rent adjustments. The calculator subtracts this amount from FFO.
- Enter routine maintenance and leasing commissions. These costs are also deducted from FFO.
- Enter shares outstanding if you want per-share metrics. This field is optional, and the per-share result appears only when the value is greater than zero.
- Select Calculate AFFO to view the REIT performance metrics. Use Reset to clear all fields and hide the results.
The output shows FFO, AFFO, and, when shares are entered, AFFO per share with FFO per share in the supporting text. FFO is a standard REIT cash-flow metric. AFFO is a more adjusted estimate after recurring property-related deductions.
What Your AFFO Result Means
AFFO is often used to review how much recurring cash flow a REIT may generate from its operations. This calculator does not decide whether a REIT is a good or bad investment. It gives a structured estimate based on the numbers you enter.
FFO vs. AFFO
FFO starts with net income, adds back depreciation and amortization, and subtracts net gains on property sales. AFFO goes further by deducting recurring capital expenditures, straight-line rent adjustments, and routine maintenance and leasing commissions. In this calculator, AFFO will be lower than FFO when those adjustment fields are positive.
Why per-share metrics matter
Per-share metrics can help users compare REIT cash flow against the number of shares outstanding. This calculator displays AFFO per share as the main per-share value. It also shows FFO per share in the same section. These values depend entirely on the share count entered by the user.
| Calculator Output | What It Shows |
|---|---|
| Funds From Operations (FFO) | Net income adjusted for depreciation and amortization and net property sale gains. |
| Adjusted Funds From Operations (AFFO) | FFO reduced by recurring capital expenditures, rent adjustments, maintenance, and leasing commissions. |
| Per Share Metrics | AFFO per share, plus FFO per share in the supporting text, when shares outstanding are entered. |
Because this is a financial estimate, the result should be reviewed with care. Real REIT analysis may also consider debt, interest rates, property type, occupancy, rent growth, dividends, acquisitions, dispositions, taxes, accounting policies, and market conditions. This calculator only uses the fields shown in the form. It does not replace professional investment, tax, or accounting advice.
Frequently Asked Questions
What is an AFFO calculator?
An AFFO calculator estimates Adjusted Funds From Operations for a REIT. It starts with net income, calculates FFO, then subtracts recurring capital expenditures, straight-line rent adjustments, routine maintenance, and leasing commissions. This helps show a cash-flow-based operating metric using the values entered by the user.
How do I calculate AFFO from FFO?
To calculate AFFO from FFO in this tool, subtract recurring capital expenditures, straight-line rent adjustments, and routine maintenance and leasing commissions. The calculator first computes FFO from net income, depreciation and amortization, and net gains on property sales, then applies those deductions to estimate AFFO.
What is the difference between FFO and AFFO?
FFO is calculated from net income plus depreciation and amortization minus net gains on property sales. AFFO starts with FFO and subtracts recurring capital expenditures, straight-line rent adjustments, and routine maintenance and leasing commissions. In this calculator, AFFO is the more adjusted cash-flow estimate.
Does this AFFO calculator calculate AFFO per share?
Yes, this AFFO calculator calculates AFFO per share when shares outstanding are entered as a value greater than zero. It divides AFFO by shares outstanding. It also shows FFO per share in the supporting text. If shares are blank or zero, the per-share section does not appear.
Why does the calculator add back depreciation and amortization?
The calculator adds back depreciation and amortization because those amounts are treated as non-cash accounting expenses in the FFO calculation. The tool follows the displayed logic by adding depreciation and amortization to net income, then subtracting net gains on property sales to calculate FFO.
How accurate is an AFFO calculator?
An AFFO calculator is only as accurate as the values entered. This tool uses fixed formulas and does not verify source financial statements, accounting policies, or REIT-specific adjustments. Results are estimates and may differ from reported company figures due to definitions, disclosures, timing, and other financial factors.
Can AFFO be negative?
Yes, AFFO can be negative in this calculator if deductions are larger than FFO or if the starting inputs produce a negative result. The tool formats negative values with a minus sign before the dollar amount. A negative result should be reviewed carefully with the underlying financial data.