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Investors guide
Short, practical guides and one-minute videos on How to evaluate a rental
Rent, expenses, cash flow and reserves. The same checklist I use on my own properties, with a worked example.
One-minute video
Run the numbers on a rental in one minute
The video needs JavaScript. The written guide below covers the same steps.
The four numbers that matter
- Realistic rentUse rents for similar homes that actually leased nearby, not the highest asking price you can find.
- VacancyBudget for months between tenants. Even good properties sit empty sometimes.
- Every expenseMortgage, property tax, insurance, repairs, management, HOA dues and utilities you pay as the owner.
- ReservesMoney set aside for big-ticket items like a roof, HVAC or water heater, so one repair does not sink the deal.
A worked example
Hypothetical single-family rental, monthly figures
These numbers are made up to show the method. They are not a quote or a market estimate. Plug in real figures for any property you are considering.
| Market rent | $1,700 |
| Less vacancy allowance (5%) | −$85 |
| Effective rent collected | $1,615 |
| Mortgage principal and interest | −$850 |
| Property tax | −$220 |
| Insurance | −$110 |
| Repairs and maintenance (8% of rent) | −$136 |
| Property management (8% of collected rent) | −$129 |
| Capital reserves | −$100 |
| Monthly cash flow | $70 |
Notice how thin the margin is once every cost is counted. A deal that looks great at "rent minus mortgage" can turn negative after vacancy, repairs and reserves. That is exactly why I run every line.
One-minute video
Walking through the example, line by line
The video needs JavaScript. The written guide below covers the same steps.
Due diligence before you commit
- Get a full inspection and price out anything near the end of its life.
- Ask for current leases, rent history and any deposits if the home is already rented.
- Check the actual property tax bill and get an insurance quote for a rental, not an owner-occupied home.
- Look up city rental registration or inspection rules where the property sits. Kansas and Missouri cities set their own.
- Stress-test the numbers: what happens if rent drops a little or a major repair hits in year one?
Have a property in mind?
Let's run the numbers together
Send me the address and I will walk through rent, expenses and reserves with you before you make an offer.