Evaluate Your Real Estate Portfolio by Creating Cash Flow Statements
By Christopher Miller, MBA
For over 20 years, I’ve helped investors lessen their landlord responsibilities through the use of 1031 Exchanges and Partial Interest Properties. Many investors have asked me “Which of my properties should I sell first?” I’ll answer that with a question: “Which are the lowest performing?” Some investors may have owned several properties over many decades but can’t answer that question. This month, we’ll review how to create a cash flow statement on your property, calculate your Return on Equity, and estimate your Property Value.
The Fun Part – Add Up Your Income
First, we’ll need to add up your gross receipts from the property. This will include monthly rent payments and other income from laundry or parking. It is important to note that Tenant Deposits do not count as income since you will need to pay that back at some point or use it for repairs. Write down your annual monetary collections as A. I’ll use $100,000 as an example.