How to analyze a property

Question

What are some specific numbers that I would need to crunch to determine if the property's  cash flow

Drew Sygit · Answer

BiggerPockets has Calculators that cover this and more if you upgrade your membership.

Allie McAlister · Answer

Hey @Lawrence Mitchell,

Great Question! Here are some numbers to take into account when evaluating a property to see if it will produce positive cash flow.

1. Gross Monthly Income ( If currently occupied, or projected gross monthly rent if vacant )

• Rent ( from all units if multifamily )

• 
• 2. Operating Expenses

Include estimates for:

Property taxes

Insurance

Property management (if applicable, and I would reccomend budgeting 10% of monthly rent for this fee )

Maintenance/repairs

Vacancy allowance (typically 5-8%)

HOA fees (if any)

Capital expenditures (CapEx – reserve for big-ticket items like roof, HVAC)

4. Debt Service ( Mortgage Payment if the deal is financed )

• Principal + interest (monthly)

Side note- A good rule of thumb to start with when evaluating properties is the 1% rule (monthly rent ≈ 1% of purchase price) for quick screening — but always run the full numbers above for an accurate picture.

Hope this helps! Best Wishes!

Jason Malabute · Answer

If you’re analyzing a property, you’ll want to look at all the main expenses that eat into your cash flow. That means factoring in property taxes, insurance, mortgage interest, repairs and maintenance, and also leaving room for vacancy. It helps to talk to a local property manager to get realistic numbers on rents, vacancy, and repair costs, and also check with the county assessor to confirm property tax estimates. Once you have those pieces, you can plug them into your cash flow analysis and see if the deal makes sense.

Min Zhang · Answer

Hey Lawrence, I agree with what Allie mentioned. I'd recommend using Rentometer and Zillow to check rental comps, and the BiggerPockets calculator to run your numbers. Hope that helps!

Lawrence Mitchell · Answer

@Allie McAlister thanks a bunch that totally helps me hone in on specific numbers. Now I can go to Zillow or Redfin and start practicing logging these in. Math was my least favorite subject in school. But it's important to turn my weakness into a strength again thank you so much

Richard Loniewski · Answer

Try Dealcheck, I use it all the time to analyze my rentals, just plug in numbers and it will give you all the info you need!

How to analyze a property

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