Description
For working adults with savings and small business owners who are thinking about a first rental property and want to judge it with numbers, not hype. This self-paced PDF guide follows one example property from the listing to a final decision. You learn why rent minus mortgage math misleads, how to estimate rent and vacancy honestly, and how to list every operating expense, including repairs, big replacements and management. You also learn to calculate net operating income, cap rate, cash flow, cash-on-cash return and debt service coverage, compare loan options, plan reserves and insurance, stress-test a deal, and know when to walk away. This is general education, not financial, investment, legal or tax advice, and landlord-tenant and tax rules vary by state.
What you will learn:
- How to fill in a one-page deal worksheet before you make any offer
- How to estimate rent, vacancy and every operating expense, including a capex reserve
- How to calculate net operating income, cap rate, cash flow and cash-on-cash return
- How financing changes your numbers, and how to compare fixed and adjustable loans
- How to size your reserves and stress-test a deal for a bad year
- How to do due diligence, set your highest price and walk away when the numbers do not work
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