1. What is the Rental Income Calculator?

The Rental Income Calculator helps property owners determine their net income from rental properties by subtracting deductible expenses from gross rental income.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• Rental Income — Total gross income from rent payments
• Expenses — All deductible expenses related to the property

Explanation: This calculation provides the property owner's net income after accounting for all operating expenses.

3. Importance of Net Income Calculation

Details: Calculating net rental income is essential for understanding property profitability, tax reporting, and making informed investment decisions.

4. Using the Calculator

Tips: Enter rental income and expenses in dollars. Both values must be positive numbers. The calculator will automatically compute the net income.

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: Is this calculation for monthly or annual income?
A: The calculator can be used for either time period as long as both income and expenses are for the same period.

Q3: How accurate is this calculation?
A: The calculation is mathematically precise, but accuracy depends on including all relevant income and expenses in your inputs.

Q4: Should I include mortgage principal payments?
A: No, only mortgage interest is deductible as an expense. Principal payments are not deductible.

Q5: How does this differ from cash flow?
A: Net income includes non-cash expenses like depreciation, while cash flow only considers actual money received and spent.