Running the Numbers on a Spring Rental

A rental property can be a great investment — if the numbers work. In Spring, a few costs vary more than investors expect. Here's a simple way to estimate cash flow.

Start with realistic rent

Use what similar homes have actually leased for recently, not the highest asking rent. I can pull leased comparables for you.

Subtract monthly costs

• Mortgage principal and interest

• Property taxes. In Spring, total rates vary by subdivision because many neighborhoods have utility districts, and rentals don't get a homestead exemption.

• Landlord insurance

• Association fees

• Vacancy allowance for time between tenants

• Repairs and maintenance

• Property management, if you use it

Look at the result

Rent minus all costs is your monthly cash flow. If it's thin or negative, the investment depends on appreciation and equity, which carry more risk.

Remember the up-front costs

Down payment, closing costs, repairs before the first tenant and reserves for surprises.

Get professional advice

A lender can show you financing options for investment properties, and a CPA can explain tax implications.

How do I estimate cash flow on a rental? Start with realistic rent, then subtract mortgage, taxes, insurance, association fees, a vacancy allowance, repairs and management costs.

Why do property taxes matter so much in Spring? Tax rates vary by subdivision because of utility districts, and rental homes don't get a homestead exemption.