How do you calculate the numbers for a rental property? Rentals are a great way to build wealth and earn passive income, but you need to be careful. When analyzing a property, there are various things to take into account. Today, we’re here with a few things that will help you make an informed decision.
The most common concern people have when considering investing in real estate is how much rent money they can get for a property. This can depend on several factors, so although Zillow could provide a reasonable estimate, it is best to consult with your agent to obtain an accurate rental rate.
“Rentals are a great way to build wealth and earn passive income, but you need to be careful.”
Another crucial aspect is expenses. The number one expense is the mortgage payment, which you should calculate based on the rental rate. Other expenses to consider include reserves for potential issues, taxes, and vacancy, which is another significant factor that people often overlook. Having a couple of months’ reserves set aside can make your life a lot easier.
To help you with all of this, we have several tools with valuable insights that can ensure you are making a sound investment decision. There may be properties that look great on paper, but when you break down the cost of owning and maintaining them, they may not be worth it. In addition, we have a partnership with Tru Asset Management, a company that can help you with property management. If you have questions about any of this or want our help, call or email us. We’d love to help you!