5 Numbers Every Real Estate Investor Should Know Before Buying a Rental Property
Updated: Sep 17
A rental property can look like a great deal and still become an expensive lesson. Before you focus on finishes, curb appeal or the asking price, get comfortable with the numbers that determine whether the property can actually perform.
1. Total acquisition cost
Your real cost is more than the purchase price. Include closing costs, inspections, immediate repairs, lender fees and any cash needed before the property is rent-ready.
2. Realistic monthly rent
Use current comparable rentals—not the rent you hope to receive. Look at condition, bedroom count, location, amenities and what similar properties are actually leasing for.
3. Operating expenses
Property taxes and insurance.
Maintenance and capital-repair reserves.
Property management and leasing costs.
Utilities the owner is responsible for.
Vacancy and turnover costs.
4. Monthly cash flow
Cash flow is what remains after the property's regular income and expenses are accounted for. Do not call the difference between rent and the mortgage payment cash flow—the property still has operating costs.
5. Exit value and long-term strategy
Know whether you are buying for cash flow, appreciation, a BRRRR strategy, long-term equity growth or a future resale. The same property can be a strong fit for one strategy and a weak fit for another.
The goal is not simply to buy real estate. The goal is to buy assets that support your financial plan. GURU REALTORS® works with St. Louis investors to evaluate opportunities with a focus on cash flow, risk, ownership and long-term legacy.
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