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New York Property Investing & Landlording →
Start with lawful, supportable rent — an existing lease, rent roll, or conservative market comps. Subtract vacancy and credit loss before operating expenses. Then include property tax, insurance, common charges or maintenance, owner-paid utilities, management, leasing, routine repairs, and a capital reserve.
The result before debt is net operating income. Only then subtract loan payments to estimate cash flow. Keep acquisition costs, immediate repairs, and required reserves in the invested-cash denominator when comparing returns.
Run at least three cases: base, rent downside with higher vacancy, and major repair. Do not count appreciation, refinancing, or future rent growth as money available to pay today's bills. If the investment fails without optimistic assumptions, the price or plan needs to change.
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