Topic · 19 articles
Rental investing
Articles
Understand your operating numbers
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.
Understand your operating numbers
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.
Understand your operating numbers
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.
Understand your operating numbers
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.
Understand your operating numbers
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.
Understand your operating numbers
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.
Understand investment returns
Cap rate: what it tells you about a property before financing
Learn what rental cap rate measures before financing, why purchase price and current value give different results, and how to compare the inputs.
Understand investment returns
Cash-on-cash return: how hard is your invested cash working?
Calculate rental cash-on-cash return with a clearly defined cash flow and invested cash, then see how CapEx, reserves and refinancing change the story.
Understand investment returns
Rental ROI: define the return before trusting the percentage
Define rental ROI by its period, costs and return components. Follow a first-year wealth bridge and avoid counting principal or appreciation twice.
Understand investment returns
Return on equity: should you review the capital already tied up?
Compare rental cash flow with current equity, distinguish gross equity from net sale proceeds, and frame forward scenarios without forecasting from history.
Understand investment returns
XIRR for rental property: cash-flow dates and the exit value matter
Use dated rental contributions and distributions to understand XIRR, test assumed net sale proceeds, and recognize input errors and multiple possible roots.
Understand investment returns
Rental metrics that are easy to misread
Read rental metrics with their cash boundaries, denominators and dates intact. Spot omitted costs, unrealized gains and double-counted principal.
Turn rental numbers into decisions
If you track only a few rental metrics, start here
Build a small rental review around cash, reserves, collections and debt coverage. Connect changes to useful questions and proportionate next steps.
Turn rental numbers into decisions
Good cash flow, low cash-on-cash return: what should you ask next?
Investigate positive cash flow with a modest cash-on-cash return by checking costs, invested cash and current equity before choosing a financing change.
Turn rental numbers into decisions
Negative operating cash flow, strong estimated XIRR: is the property working?
Test cash-funding needs behind a strong estimated rental XIRR. Compare net exit values, a delayed sale and a loss case without mistaking forecasts for cash.
Turn rental numbers into decisions
Keep or sell a rental: compare the next chapter, not just the past
Compare keeping and selling a rental over the same future horizon. Include net proceeds, reinvested cash, debt, costs and clearly labelled tax sensitivities.
Turn rental numbers into decisions
Buy another rental or stabilize the portfolio first?
Test the cash, reserves, shared risks and management demands of another rental. Compare annual coverage with the dated funding needs after purchase.
Turn rental numbers into decisions
Put more money into an existing rental: repair, improve, or pay down debt?
Separate necessary repairs from optional improvements and debt reduction. Compare full project cash needs, incremental income and less favourable outcomes.
Turn rental numbers into decisions
Take out equity or leave it in the property?
Model equity borrowing as a new debt decision. Check net cash after fees, full loan payments, reserves, investment risk and the use-of-funds tax question.
