Research guide
How to Underwrite a Rental Property
A practical first-pass framework for rent, vacancy, operating expenses, debt service, reserves, and exit assumptions.
Rental underwriting starts with explicit assumptions. Separate gross scheduled rent from effective income, then model vacancy, operating expenses, capital reserves, debt service, and the cash required at closing.
Start with the property, not the headline yield
Use market rent evidence, property taxes, insurance quotes, HOA documents, utilities, and a realistic maintenance reserve. A high projected cap rate can disappear when taxes, insurance, or deferred maintenance are understated.
Use the calculator as a screening layer
Use the outputs to decide what deserves local diligence, lender review, inspection, and a more detailed operating budget.
This guide is educational context. Verify current local facts and professional advice before making a decision.