How to Calculate Numbers on a Rental Property

Discover our straight-forward and easy to use formula for calculating the numbers on a prospective rental property purchase. Welcome to Hipster’s first how-to video! I’m going to show you how to run quick numbers on a rental property. You can use this easy and fast formula for any property you’re looking at. I'll be behind the scenes doing the calculations on my white board and calculator (yes, it really is that big!) to show you how it works. This is an actual rental property I'm using as an example, including the actual purchase price and numbers. (You have to love my handwriting!) You always want to verify the numbers you run before you buy any property (for example, with a property manager), but it helps to do your homework first. This particular house is in Indianapolis and gets $1,075 in rent. It was built in 2002. Super cute little house: three bedroom, two bath. But all we care about right now is the numbers… Want to know more about the latest deals? Subscribe to our Newsletter: http://goo.gl/41tmRK ----- Are you a responsible professional ages 30-49 and want to make smart investments? Have you thought about real estate investing but ruled it out because it sounded complicated or risky? Do you want to grow your money, but are worried about scams and ripoffs? Are you a cool person who I’d just enjoy saying “hi” to? If you answered "YES" to any of those questions, then we should talk. I help people just like you to find smart, safe, passive real estate investments so your money is working hard for you, even if you lack real estate investing knowledge. If you're cautious or nervous, then I can help you get educated on the best real estate investments possible and guide you towards getting that first investment property under your belt. When the passive income starts flowing, you'll be hooked and be ready for more properties, and I can introduce you to actual high quality deals and partners that I would, and do, actually invest in myself. I promise, I won’t refer you to anyone I haven’t personally bought through myself. (true story)

Comments

1. too bad 100k would buy u a hay house here in aus
2. I understand that many people don't have a 20% down payment on a house, but why would anybody rent for $1075, when they can buy for a mortgage of $439? even with an FHA loan, at 3.5% down, the payment should be a lot less than $1075
3. Please respond lol. (:
   My biggest concerns:
   1. How do you truly find rental rates when the rental rates in the area fluctuate drastically? What if your property could only make $700/$800/$900 how do you know that you will get X amount just because other properties do?
   
   2. Do you deduct anything other than PITI and V&R? (CapEx, etc.) Alot of investors say that you must include this. I understand it, but I am in a pretty good rental market, (Cleveland OH) And if I really deduct everything BiggerPockets tells me to, I don't see any deal cash flowing no matter how much I put down. Do I really need to use the 50% rule? or are other investors just trying to scare us off? Lol.
   Thanks in advance!! It means a lot.
4. Badass help my friend!
5. I wish I could get a 30 year amort. on an investment property! Any ideas - in East TN. I've got a bank who will amort. 20 years with a 10 year call.
6. Can you do a video on a non mortgage property paid in full?
7. excellent
8. Great video and love how you have simplify the process to help me understand the concept. Real word numbers can be plugged in now that I have learned the two most important things that was a mystery to me...Cap Rate and Cash on Cash ROI. Thank you. You rock!!
9. very useful!
10. I'm confused, who has $100,000 cash to put on a house that would need this advice? I feel like the person who needs it the most is the one who's just getting started and scraped and scrounged to gather a 3.5% down payment on an FHA loan. Where do I get $100,000 cash?
11. Great vid
12. Wow this was one of the easiest videos and explanation by far...i've been looking for a clear explanation on this subject... Loved it!
13. Sorry, what is the point of this video? What conclusions are you drawing? Thanks!
14. Question.
    For the property expenses,
    Can you explain the difference between Repairs and Property Management? What would be an example of both. Thank You.
15. excellent job. do you ever build in appreciation and tax saving. would make your deal even better
16. Monthly expenses - not sure about your country's systems but in Australia I would also need to add on council rates and if in a strata title (apartment or townhouse complex) setup there are also fees for that plus water connection and usage charges.
    Also take into account increased accountant fees, then there are advertising and letting fees on top of management fees for each time property is vacated and new tenants sought. Basically a yearly gross rental income here of $25000 for a strata titled property will net me about $12,500 after all outgoings.
    So cash flow is poor but upside if bought on good area is capital growth and can reduce tax liability from depreciation of building, fixtures etc over time so may get back a couple of thousand in tax from that.
17. i bought a house in south texas all cash $70,000. rehab was around $6,000. The value of the house is $100,000 and increasing. Yes it was built in 99 and will soon need a roof and other repairs however it is being rented at $1,000 per month. I do have a property manager and until this video i was about ready to sell it.. i am always looking for the best possible way to invest and it seemed to not make sense to me given taxes, insurance, repairs, vacancies etc. after seeing this i now realize i am getting a decent return on my investment. i am not going to get rich off of this however its better than other investments I've seen and i find comfort in the fact that i can always pull the trigger and sell it!
18. This is a very easy to understand video. Great Job!
19. Where are you buying a one hundred thousand dollar house and renting it out for 1075 a month..?
20. It's a wonderful tool. Thanks so much for sharing, I really appreciate.