Before you buy your first (or next) real estate deal, you need to know one thing—how to calculate cash flow on a rental property.
The problem? 99% of investors do this wrong and get burned as a result. That’s why after buying dozens of rental properties, we’ve come up with arguably the most accurate way to calculate real estate cash flow, and today, we’re showing you how to do it, too.
Joining us is Ashley Kehr from the Real Estate Rookie podcast, who’s been buying rentals routinely for over ten years now. We’ll use the BiggerPockets Rental Property Calculator (which you can try for free!) to run numbers on a real rental property Dave is looking to buy right now.
You’ll learn exactly how to estimate both fixed and variable expenses, how much emergency reserves to set aside, how to account for property management fees, vacancy, repairs, and more, plus what to do to instantly boost your potential cash flow before you buy!
Dave Meyer:
Are you calculating cashflow the right way? Because this is the key metric that will tell you if a property is the right deal to buy and how your investments are actually performing. But it only works if you’re including all of the necessary inputs when you do the math. If you’re only subtracting your mortgage payment from your rental income, that is not cashflow. This is how you calculate cashflow the right way. Hey everyone. I’m Dave Meyer. I am a data analyst. I’m the head of real estate investing here at BiggerPockets, and with me today on the show is Ashley Care co-host of the BiggerPockets Real Estate Rookie podcast. Ashley, thanks for being here.
Ashley Kehr:
Dave. Thank you so much for having me today. I am excited to talk about cashflow.
Dave Meyer:
Yeah, it’s a super crucial thing and I think some people oversimplify it, but it doesn’t need to be hard. You just need to make sure that you follow the right steps. I don’t know if you ever see this Ashley, but I see these people on the internet all the…