Series · 6 articles

Understand your operating numbers

Articles in reading order

1. 

   Part 1

   Operating expenses: what it costs to keep a rental running

   Learn which rental costs belong in operating expenses, what to keep separate, and how to investigate changes using a practical annual CAD example.

2. 

   Part 2

   Repairs, CapEx, and capitalized items: where does this expense belong?

   Separate rental repairs, capital spending, and reserves. See how classification changes NOI and cash flow, and why tax treatment needs its own review.

3. 

   Part 3

   Net operating income: what NOI includes and leaves out

   Calculate rental net operating income with a worked CAD example. Learn what NOI excludes, why lender definitions differ, and how to investigate changes.

4. 

   Part 4

   Rental cash flow: what is actually left after the bills?

   Bridge rental NOI to owner cash flow after debt payments, capital work, and reserves. Use a worked CAD example to understand what is available before tax.

5. 

   Part 5

   DSCR: can the property's income support its debt?

   Calculate rental DSCR, distinguish break-even coverage from lender requirements, and test how falling income or higher payments affect your cash cushion.

6. 

   Part 6

   Operating expense ratio: when rising costs deserve a closer look

   Calculate rental operating expense ratio and identify whether income or costs drove a change. Use worked examples and practical review steps.