House Income Formula:
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House income is the net profit generated from a rental property after subtracting all associated expenses from the rental income. It's a key metric for property investors to evaluate the profitability of their real estate investments.
The calculator uses the simple formula:
Where:
Explanation: This calculation provides the net income from your rental property, which is essential for financial planning and tax purposes.
Details: Regular calculation of house income helps property owners track profitability, make informed decisions about rent adjustments, identify cost-saving opportunities, and prepare accurate financial statements.
Tips: Enter your total monthly or annual rent income and all associated expenses in the same currency. The calculator will show your net house income.
Q1: What expenses should be included?
A: Include mortgage payments, property taxes, insurance, maintenance costs, utilities (if paid by owner), property management fees, and any other regular expenses.
Q2: How often should I calculate house income?
A: Monthly calculations are recommended for active management, with annual summaries for tax purposes.
Q3: Should I include vacancy periods?
A: Yes, you should account for average vacancy rates by either reducing the rent income or adding vacancy as an expense.
Q4: What's a good house income percentage?
A: A net income of 30-50% of gross rent is generally considered good, depending on location and property type.
Q5: How does this differ from cash flow?
A: House income is a profitability measure, while cash flow considers actual cash movements (including principal payments and timing differences).