Calculating Numbers on a Rental Property [Using The Four Square Method!]

Learn how to analyze a rental property with the unique “four square” method and make sure your next rental property investment is a cash cow!

In this video from BiggerPockets.com, Brandon Turner (author of The Book on Rental Property Investing and co-host of the BiggerPockets Podcast) shares with you the step by step method for determining the monthly cash flow and cash on cash return for any rental property investment.

Calculating the numbers on a rental property doesn’t need to be difficult – and this video proves it.

20 thoughts on “Calculating Numbers on a Rental Property [Using The Four Square Method!]”

  1. Your mortgage will be more than that,the taxes will be a lot higher than 150 per month for a 200k property,it will be nearly impossible to get a95% mortgage with a 30 year spread at 5% down. Using your numbers that is a terrible deal.

  2. Great video guys. Just one thing stock markets 7% return is net of inflation. If u add inflation back number is more like 10.5%. So it's 9.6 v 10.5% but with the market you have no residual income and maybe even lower risk.

  3. Great info. You guys can also go to Money94. Com if you're trying to make money online. This is what I've been doing and I'm happy with my results.

  4. How does this change once you pay off the mortgage? I would assume that once its paid off you would make a lot more money, but I've watched several videos about this and no one talks about it. Is there a reason? Do you not keep a house that long when it is an investment? Would repair costs around that time make it not worth it?

  5. You need to buy a new ruff every ten years.. what do you mean, like a new dog every ten years? Can we adopt to save money?

  6. Crunching numbers seems to be the easy part. Finding the actual property to crunch the numbers on is the tough part 🙂

  7. i'd invest in a private REIT…you get around 10 – 15% yearly yield, all you pay is usually a 1% or less management fee and your regular income tax…also they're much more liquid if you wanna up and leave.

  8. Great info.
    Here is my, 4 step plan that includes my death.
    1. Never sell a property.
    2. Use depreciation and carry forward to defer taxes until the properties are sold.
    3. Considering step one "Never Sell" and step two "Defer taxes until sold" leads to tax free income. It is really consider deferred tax but since the plan is to died without selling you will have paid no taxes on the income or appreciation. You did realize the income but not the appreciation. The appreciation is dealt with in step four.
    4. At the time the property is inherited it is reappraised at the current market value and the process can start again to depreciate over the 26.5 years or sell without paying any taxes if sold for for the current appraised value or less. The taxes that were deferred are never paid, this provides a HUGE TAX ADVANTAGE. (This is really somewhat of a moot point. I don't really give a crap about this step since died in step three)

    Note: If you start this plan with more than 25 years left on your clock you may need to add more properties to insure there is a high enough deduction to defer the income as some properties depreciate to zero….. another way to look at this is to plan to add properties until you have 25 years left on your clock then you can ride it out.
    The key to the plan is to never sell a property.

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