When buying real estate as rental property or investment, figuring out the cash flow and return on investment is absolutely critical.
Many factors are involved – rental income, repairs, operating expenses are the obvious ones. Important but not so straight forward ones include tax benefits from mortgage interest and property tax deductions, less than 100% occupancy rate, income forgone on down payment which could otherwise be earning interest in bank. Last, non-cash depreciation expense on the property would reduce rental income on tax returns.
If you are considering investing in real estate but not sure on the cash flow and potential return, call us at 714.557.5888, we will help you figure it out and decide whether it is a deal or no deal.