Bank finance articles and tips

The profitability of a rental income property, of course, is measured by the amount of cash flow the property generates. What a real estate investor always wants to know when considering his or her profitability from the property for any given year is "How much did I make?" And this is resolved by considering the property's cash flow plus or minus the investor's taxable income or loss.

To compute taxable income or loss we must first determine the property's net operating income (NOI). Net operating income is gross operating income less operating expenses. For example, say a rental property generates an annual rental income of $205,993 and annual operating expenses of $41,718 in: The NOI would be $164,275....