How Do You Calculate Positive Cash Flow On Rental Property?
The best time to determine whether or not a property will positively cash flow or not, is before you buy it. However, if you already have the property, then managing the costs and the rental price can go a long way to making that property positively cash flow.The idea of investing cash today is to ensure greater returns later than if that cash stayed in your drawer for the same period of time. This financial concept is often referred to as cash on cash return. The greater the return on the cash invested, the better the investment. Positive cash flow (not future speculative returns) is the more effective way to invest in real estate. Knowing how to calculate that cash on cash return is key to extracting profit from that investment. Gather all property specific information that contributes to costs or expenses on that property.Purchase price, deposit information, closing costs, taxes, insurance and maintenance are just some of the information that must be collected up front in preparatio
