Annual Gross Income:
Property rents for $1,500/mo. Annual Income is $18,000.
Total of Property Taxes, Insurance, Maintenance, Utilities, Upkeep, & Property Management.
Total in 2015 was $7,000.
Net Operating Income (NOI) = Income – Expenses
$18,000 – $7,000 = $11,000
Debt Service (Monthly Mortgage Payment):
Monthly mortgage payment is $650; the annual total is $7,800.
Positive Cash Flow = Net Operating Income – Debt Service
$11,000 – $7,800 = $3,200.
Profit on this house is $3,200 per year or $266.67/month.
Remember, this is just one example. There is risk involved in any type of investment, including real estate. However, relying on professional advice and people who have expertise with a given market can greatly reduce risk and increase the likelihood of positive returns on your investment.