1. What is Net Rental Income?

Net rental income is the profit a landlord makes from rental properties after subtracting all expenses from the gross rental income. It's a key metric for evaluating rental property performance.

2. How the Calculation Works

The calculator uses the simple formula:

Where:

• Gross Rental Income — Total rental payments received before any deductions
• Expenses — All costs associated with maintaining and operating the rental property

3. Importance of Net Income Calculation

Details: Calculating net rental income helps landlords understand their true profit, make informed decisions about rent pricing, property improvements, and evaluate investment performance.

4. Using the Calculator

Tips: Enter your total monthly or annual rental income and all associated expenses in dollars. The calculator will show your net profit after expenses.

5. Frequently Asked Questions (FAQ)

Q1: What expenses should be included?
A: Include mortgage payments, property taxes, insurance, maintenance, repairs, utilities, property management fees, and other operating costs.

Q2: Should I calculate monthly or annually?
A: Both approaches are valid. Monthly calculations help with cash flow management, while annual calculations provide a bigger picture.

Q3: What's a good net income percentage?
A: Typically 35-65% of gross income is considered good, depending on property type and location.

Q4: How does this differ from cash flow?
A: Net income is accounting profit, while cash flow considers actual cash movements (including principal payments, capital expenditures).

Q5: Should I include depreciation?
A: Depreciation is a tax deduction but not an actual cash expense, so it's typically excluded from this calculation.