One-Minute Math: How to Know if a Rental Will Cash Flow

Author

Roger Blankenship
September 22, 2025 • Estimated Reading Time: 3 minutes

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🏠 You don’t need a 42-tab spreadsheet to know if a rental will make money. You just need a quick “yes” or “no” before you waste time crunching numbers.

Most investors overcomplicate rental analysis. Taxes, insurance, appreciation — they matter, but not for a first pass. You just need a fast filter to know if the deal deserves more attention.

Here’s the 60-second test:

  1. Price & Rent: Get the asking price and estimated rent (Zillow, Rentometer, or a quick call).

  2. 1% Rule: Rent should be at least 1% of price. $1,500 rent on a $150K house? Good. $1,200 on a $175K house? Probably pass.

  3. 50% Rule: Assume half the rent goes to expenses. $1,500 rent = $750 net operating income.

  4. Financing: Quick rule of thumb — $6 per $1,000 borrowed at 6%. Subtract that payment from NOI. If cash flow stays positive (or close), move forward.

That’s it. No paralysis, no overthinking — just a fast way to ditch losers and focus on properties that actually have a shot.

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