![]() Understanding the key financials of a property allows you to understand exactly what cash flow is. When looking at a real estate investment, there are two main components you need to fully understand and be able to forecast: income and expenses. ![]() When you’re looking for a potential investment property, you want to make sure you do your due diligence when researching how much cash flow a property will generate. Meaning it’s income you bring in monthly that doesn’t require a lot of your active working hours, like a typical 9-5 job.Ĭash flow is one of the most popular rental property ROI calculations. It’s the income generated when your rental returns exceed your monthly expenses. When you hear real estate investors use the phrase “mailbox money,” they are referring to cash flow.Ĭash flow = passive income. Luckily, calculating cash flow is easier than you might think. After all, cash flow is the lifeline of a rental real estate business. An essential concept aspiring landlords and real estate investors need to grasp before diving into rental real estate is how to calculate rental property cash flow.
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