How To Accurately Calculate Cash Flow BEFORE You Buy…
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To calculate if a rental property will cash flow before buying it, subtract all expenses from the rent. There are six expenses to consider: real estate taxes, mortgage, insurance, monthly maintenance, property management, and vacancy. Real estate taxes can be found on county or city tax records or on Zillow. Mortgage should be easy to calculate if you know how much you will have in the property. Get quotes for insurance. Set aside $150 per door per month for maintenance. Property management should be 10% of rent, even if you manage it yourself. For vacancy, use 5% of rent. Subtract all expenses from rent to get net cash flow. Aim for at least $250 per door.
To calculate if a rental property will cash flow before buying it, subtract all expenses from the re