Real Estate Analysis: Analyze Rental Property

Finding a good deal is how we all make money in real estate. We at BiggerPockets have set up a forum specifically designed to help our members get input on potential deals.

Our Real Estate Deal Analysis and Advice Forum is a great place to go to not only get advice, but to learn how to analyze properties that you may be interested in. Our members are very helpful in picking apart any real estate deals that you may be considering.

For a primer in rental property deal analysis, be sure to check out this fantastic article: Introduction to Real Estate Investment Deal Analysis

If you're looking for a quick way to analyze a property, the 50% Rule (more) is a great screen. This guideline says that on average, operating expenses and vacancy are about 45% to 50% of the rent. So, if a property rents for $1,000, on average, over time, your expenses will be $500 a month. If your debt service (mortgage) is more than $500, then you're going to be losing money each month. Again, this is merely a screen, but it is a good way to quickly analyze whether a property will be cash-flow positive each month.