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

  1. lafayette jones

    keep up the good work, this is a gem of a channel I'm glad I stumble upon.

  2. Adriane C

    Way too low on ROI. You can find SFH for $50k & rent for $750-850/month & ROI 10-15%

  3. Paula Pramschuefer

    If you have others to invest with you, you will always be able to have more purchasing power (meaning larger investment). If the numbers work (conservative numbers), and if it is managed well, then the property should have a return beyond the initial investment. The Managing Partner should be compensated for their hard work and additional liability. Usually the managing member will take their cut until the limited partners receive their initial capital investment back.

  4. Herakles

    to me for the eg he used, i wouldne touch that property – 400 month…it means its priced too high.

  5. Herakles

    just closed on our first property. Was 100,000. My total expences is 725 mo. Rened for 1300 mnth plus all expeces.. We clear 575 month. But yes number 2 critical for the newbies. You have to talk to bank too to get a close estmate of your monthly estimated payment with all expences combined.

  6. Lisa Blumenthal

    What happens if u pay cash? Do u do it the same way?

  7. Tony C

    Real Estate investing talk! https://youtu.be/jo9qWBJYlZE

  8. Joshua Cassino

    The ruff. 🐢

  9. Billy Smith

    never use a red ink to do numbers bad juju,good video finding out how much real money you are making, i.e % on money invested .

  10. Stefan Seibold

    Great Great Video!! Thank you from Germany! πŸ‘ŒπŸ»

  11. PASS FPGEE AND TOEFL

    Absolutely love your channel!!

  12. Christopher Becker

    I love the video but what you didn't mention was Income Tax at the end of the year. The feds want to tax your $2000/mo x 12 months. So they consider that entire money piece as I come and want to tax you that as income. Minus your tax and interest deduction. Doesn't year end income taxes pretty much soak up your $390 end of month profit?

  13. Financial Mappers

    Investing in property can be an effective means of power charging your wealth. There are arguments for investments with either positive or negative cash flow. Having financial planning software which will integrate all your loans over an extended period of time will allow you manage your debts more efficiently.

    You could save yourself thousands of dollars in interest we a good debt management plan.

    One of the big time bombs, can occur when property investors don’t think about capital gains tax when selling the property. If you have owned the property for 20 to 30 years, capital gains tax can be a substantial amount of money. This tax reduces how much you can re-invest from the profits. Having financial planning software which will calculate your future capital gains tax will allow you to manage your cash flows more efficiently.

    The great thing about real estate is that if you never sell your property, you never pay capital gains tax. You just need to make sure that when you buy the property, it is something you can hold and pass on to your children as an inheritance. That means, having an adequate rental income to support you in your retirement.

    Do a YouTube search on Financial Planning Software and see what is available. Make sure it has good modelling tools and can give you easy to read reports on you investments.

    Managing your property investments and cash flows efficiently may save you thousands of dollars.

  14. The Nielson Tribe

    Thanks for all the awesome info! 😍

  15. Tay Nunn

    Dawg. This video was beyond great until you mentioned turning the property around and selling it for a million dollars. Let's NOT get crazy, let's keep it realistic

  16. Maggie Zhang

    The ROI is based on how much cash we already put in? So the more cash in, the less percentage ROI rate? Why put more cash in become a bad thing?

  17. Luke Johnson

    Damn , this is so f*cking helpful 😍

  18. Fred Houses

    #biggerpockets Thanks @brandonturner

  19. journeyofanartist

    Peanut butter is the best color

  20. Queen_B

    I like your videos but your mic amplifies the sound of the market screeching the board and I can't sit through it