How to calculate rental cashflow for IP?

Investment 101 is that its an assets earnings that determine its value, not the other way around.

Not to have a dig at you, but it's amazing how many 'investors' cannot fathom this concept. Throw in a bit of ignorant greed, emotion, and urban myth, and it's no wonder there is often such a disconnect between rents and selling prices.

A more polite way to put it is that a tenant doesnt give a c&@p what the property valuation is, they care what the rent is compared to the next comparable rental.

 

So how do you determine the value of a ppor, when owner occupiers don't look at rent? And then becomes a comparable for the investment property next door?

The rental market is not directly tied to the buying market, because buying is dominated by owner occupiers.

 

Owner occupiers are not investing so they dont need the investment case to add up, which means they can pay whatever thier heart tells them.
For that reason I can't make the investment case work for the types of properties I've typically and currently do rent... so as a result I rent them.

From my observations It does seem that higher priced / more desirable properties do work out better to rent than own. That bias seems to shift towards owning in cheaper or less desirable areas however.

 

if it was positive taxable income it would be added to your other income and you would pay tax accordingly
In your example it would be $2,000 added to your other income.as $2k is the taxable income.
Cashflow is probably correct