Calculating NOI for Real Estate and How to Start Investing with $70K (Rookie Reply)

Real Estate Rookie

BiggerPockets

How To, Education, Business, Investing, Entrepreneurship

4.8 • 1.7K Ratings

🗓️ 22 November 2024

⏱️ 38 minutes

🔗️ Recording | iTunes | RSS

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Summary

Want to estimate your NOI (net operating income) BEFORE you buy a rental property? Calculating NOI in real estate isn’t hard, and after doing this dozens and dozens of times, we’re sharing how to estimate things like taxes, insurance, and maintenance costs so you know you’re buying a killer deal. Speaking of first deals, how much do you need to get started investing? $20K? $50K? $100K? A fellow rookie has $70K ready to invest but doesn’t know the next best move. We’re sharing exactly how they should start, and you can copy these steps no matter how much money you have. It wouldn’t be a Rookie Reply if we didn’t discuss tricky tenant situations. One investor has a tenant who is FED UP with a broken outlet. Sounds pretty reasonable, right? Well, the tenant is giving the landlord an unreasonable ultimatum. What should the investor do? Let the tenant take care of things on their own (and potentially damage the property) or put their foot down and follow the lease agreement? Looking to invest? Need answers? Ask your question on the BiggerPockets Forums! In This Episode We Cover: How to estimate your taxes, insurance, and maintenance costs before you buy a rental property The expenses that short-term rental investors always forget when running numbers How to respond to a tenant when they’re sending you unreasonable maintenance requests The first step you should take when deciding to invest in real estate How to get your first rental with just $70K (or less) and mistakes beginners make And So Much More! Links from the Show Ashley's BiggerPockets Profile Tony's BiggerPokckets Profile Join BiggerPockets for FREE Real Estate Rookie Facebook Group Real Estate Rookie YouTube BiggerPockets Agent Finder BiggerPockets Market Finder BiggerPockets Real Estate Investment Calculators Real Estate Market Analysis for Beginners | Rookie Resources Hug Your Haters NeighborhoodScout BrightInvestor Protect Your Properties with an LLC through Corporate Direct Analyze Rental Properties Faster with “Real Estate by the Numbers” Property Manager Finder How to Invest in Real Estate with $50K in 2024 (00:00) Intro (01:04) Calculating NOI (08:36) Estimating Maintenance Costs & Other Fees (11:48) Unreasonable Tenant Requests? (23:49) Start Investing with $70K Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/rookie-487 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Let's get your questions answered.
0:07.3	My name is Ashley Care, and I'm here with Tony J. Robinson.
0:11.8	And this is the podcast here to help you kickstart your real estate investing journey.
0:15.6	And today, we're diving back into the Biggeropockets Forum to get your questions answered.
0:19.7	Now, guys, the forums are the absolute best place to quickly get all of your real estate investing
0:23.6	questions answered by experts like me, Ashley, and so many others. So what are we going to talk
0:28.0	about today? We've got a couple things here. Number one, we're going to talk about how to
0:31.4	calculate your NOI as a first-time investor. We're going to talk about a tenant who has some appliance issues and whether or not you
0:37.8	as the landlord should get those fixed for them. And then we'll finish off by talking about
0:41.1	how to get started in real estate with $70,000. Now, before we jump in, we want to give a quick
0:46.4	thank you to Corporate Direct. This episode is sponsored by Corporate Direct, where you can protect
0:50.8	your properties with an LLC and let corporate direct take care of the paperwork.
0:55.4	Go to biggerpockets.com slash direct for a free 15-minute consultation and 100 bucks off if you
1:01.6	mention the Real Estate Rookie podcast.
1:03.5	Now let's get into the show.
1:04.2	Okay, so our first question here is pulled from the Bigger Pockets forums.
1:08.7	And this question says, hi, I'm a first-time investor trying to
1:12.3	underwrite to make an all-cash offer on a duplex. I've always struggled with coming up with
1:17.8	operating expenses to calculate my NOI, my net operating income, specifically maintenance and
1:25.5	insurance. I can find out pretty easily what the property taxes,
1:29.6	and I can shop around or just guess about 8% to 10% property management fees.
1:35.9	But insurance and maintenance is where the NOI's calculation can really confuse me.
	...

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