Investors often use the : expect 50% of gross rent to go toward expenses (excluding the mortgage). Mortgage (P&I): Principal and interest on your loan. Property Taxes: Monthly escrow amount.
Benchmark: Usually ranges from 4% to 10% depending on the market. buy and hold real estate calculator
Why it matters: This is the most critical metric. It tells you exactly what your "cash" is earning compared to a savings account or the stock market. 💡 Example Calculation $200,000 house ($50,000 total cash invested). Rent: $2,000 / month. Total Expenses + Mortgage: $1,700 / month. Monthly Cash Flow: $300. Annual Cash Flow: $3,600. Cash on Cash Return: 7.2% ($3,600 / $50,000). Investors often use the : expect 50% of
Savings for "big ticket" items (roof, HVAC). 000 house ($50