How to Project Revenues to Determine Rental Property Profitability
During the course of a real estate analysis, when an analyst or real estate investor is trying to determine whether a rental property is profitable and might offer a good investment opportunity or should be dismissed, analysts and real estate investors commonly evaluate the property’s future revenues. The idea is to project what the property’s income and operating expenses will be for perhaps as many as ten years based upon some assumptions and then deduct for loan repayment in order to arrive at an estimate of what the property’s cash flows and rates of return become for those future years.
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How to Project Revenues to Determine Rental Property Profitability