When it comes to investing in rental properties it is important to know the metrics that determine whether your property is likely to be profitable.
The Formula You Need to Know
Below is the simple formula to determine your operating costs which then allows you to figure your net operating income (NOI).
It what I use to make sure I "buy right" as I like to call it:
Knowing which items going into you operating expenses is vital. The ones in the above formula are mainstays and should always be included.
If a rental property won't cash flow on paper, then why assume it will magically cash flow in real life.
I do my best to follow the numbers and leave my emotions out of it. Easier said than done at times.
Published by ScaredyCatGuide
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