The startup costs associated with the development of rental properties can be steep. If you want to secure a steady cash flow, you need to be confident that your property holds value. However, quantifying a good cash flow is a highly individual process.
With that in mind, here are some steps to determine how much cash flow is good for a rental property.
How to Calculate Your Cash Flow
When you’re calculating your cash flow, you need to account for the expenses associated with the property, as well as the gross income that the property brings in. In essence, your net income — the amount of money you have left after you’ve paid all of your bills — constitutes the liquid assets that you have available. (more…)