How to Analyze a Rental Property (4 Quick Steps)

Knowing how to analyze a rental property is one of the most crucial skills when investing in real estate. If you don’t know how much a house will rent for, the cost to upkeep, and the profit every month, you’ll have no way of distinguishing a good deal from a bad one.

Today, Tony Robinson, co-host of the Real Estate Rookie Podcast shares the four steps to rental property analysis. Tony even shares an example of the first rental property he owned and how he came up with his numbers.

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00:00 Knowing the Good Deals from the Bad
00:53 Step #1: Determine the Potential Income
01:58 Step #2: Identify Expenses
06:04 Step #3: Income - Expenses = Profit
06:30 Step #4: Calculate Your Returns
07:18 Running the Numbers on Tony's First Deal

[lukaswiebe]

Do you have to use a special calculator for cash on cash return? I just used my normal one 2, 016 divide by 20k and that gave me 0.1008. did I miss a step?

[ir]

Uh Cash-on-cash return is 2016/20000*100=10.08% not 8%

[Walina]

Cap rates are not a return metric. Cap rates come from an income approach to value.