Fifty Percent Rule Estimate

Estimated annual cash flow assuming 50% of rent goes to expenses.

Example Result

Sample Data

-$7,490

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

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Fifty Percent Rule Estimate Formula

(Monthly Rent x 50% - Monthly Mortgage) x 12

($2,850 x 50% - $2,049.13) x 12

-$7,490

What This Means

A sample property priced at $385,000 with $2,850/month rent has a fifty percent rule estimate of -$7,490. The 50% rule gives you an instant cash flow estimate. If even this conservative estimate shows negative cash flow, the deal likely will not work. If positive, it warrants deeper analysis with actual expense numbers.

Where This Value Comes From

Fifty Percent Rule Estimate is not entered directly — it is calculated from Monthly Rent and Monthly Mortgage Payment. See the formula breakdown above and the detailed inputs below.

Calculated From

Fifty Percent Rule Estimate is calculated using these inputs:

Monthly Rent

The gross monthly rental income collected from tenants.

Found on your lease agreement

$2,850

Monthly Mortgage Payment

Monthly principal and interest payment on the mortgage.

$2,049.13

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Why It Matters

The 50% rule gives you an instant cash flow estimate. If even this conservative estimate shows negative cash flow, the deal likely will not work. If positive, it warrants deeper analysis with actual expense numbers.

Detailed Explanation

The 50% Rule estimates cash flow by assuming half of gross rent goes to operating expenses. This quick calculation provides a conservative cash flow estimate before detailed analysis.