1. What is Rental Property Income?

Rental property income is the net amount a property owner earns after deducting all deductible expenses from the gross rental income. It's a key metric for evaluating the profitability of an investment property.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( Rental\ Income \) — Total rent collected from tenants (USD/month)
• \( Expenses \) — All deductible expenses associated with the property (USD/month)

Explanation: The formula calculates the net income by subtracting all property-related expenses from the gross rental income.

3. Importance of Calculating Rental Income

Details: Accurate income calculation helps property owners assess investment performance, make informed financial decisions, and properly report income for tax purposes.

4. Using the Calculator

Tips: Enter the total monthly rental income and all deductible monthly expenses in USD. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What expenses can be deducted?
A: Common deductible expenses include mortgage interest, property taxes, insurance, maintenance, utilities, property management fees, and depreciation.

Q2: How is this different from cash flow?
A: Rental income is a component of cash flow but doesn't account for principal payments, capital expenditures, or other non-deductible costs.

Q3: Should I include security deposits as income?
A: No, security deposits are not income unless you keep part of it for damages when the tenant moves out.

Q4: How often should I calculate rental income?
A: Monthly calculations help track performance, but you should also do annual calculations for tax purposes.

Q5: What's a good net income percentage?
A: Typically 35-65% of gross rent after all expenses, depending on property type, location, and financing.