AFFO Calculator

What Is AFFO?

Adjusted funds from operations (AFFO) is a financial metric used to evaluate the performance of real estate investment trusts (REITs). It refines the funds from operations (FFO) calculation by accounting for recurring capital expenditures, routine maintenance costs, and rent adjustments. This gives investors a clearer picture of a REIT's ability to generate cash and sustain dividend payments over time.

Our AFFO calculator computes both FFO and AFFO in one go. Enter your REIT's net income, depreciation, gains and losses from property sales, interest income, and recurring adjustments. The calculator instantly shows the AFFO and per-share values, helping you assess dividend coverage.

AFFO vs. FFO: What Is the Difference?

FFO is commonly used as an operating cash flow proxy for REITs. It starts with net income and adds back depreciation and amortization, then adjusts for gains and losses on property sales and interest income. However, FFO does not account for the ongoing costs needed to maintain a REIT's properties.

AFFO goes further by subtracting capital expenditures and routine maintenance while adding rent increases. This makes AFFO a more conservative and accurate measure of a REIT's sustainable cash flow. Most REIT analysts consider AFFO superior to FFO when evaluating dividend safety.

How to Calculate AFFO

The calculation involves two steps. First, compute FFO using this formula:

FFO = Net Income + Depreciation & Amortization + Losses on Property Sales − Gains on Property Sales − Interest Income

Then adjust for recurring items to get AFFO:

AFFO = FFO + Rent Increases − Capital Expenditures − Routine Maintenance

For example, a REIT with $500,000 net income, $150,000 depreciation, $125,000 gains, $80,000 losses, $75,000 interest income, $50,000 rent increases, $60,000 capex, and $35,000 maintenance would have an FFO of $530,000 and an AFFO of $485,000. With 100,000 shares outstanding, the AFFO per share would be $4.85.