Separate gross rental income from income after operating expenses. Show assumptions rather than promise a return.
01
Start with evidence
Ask for the period and source behind rental figures. Separate historical receipts, owner estimates and future projections.
02
List operating costs
Consider management, utilities, cleaning, maintenance, insurance and replacement reserves in the working model.
03
Use matching measures
Gross yield divides annual gross rent by purchase price. Net operating yield divides annual net operating income by total acquisition and setup cost. Financing and taxes need separate treatment.
04
Test sensitivity
Explore lower income, higher maintenance and additional setup costs. Scenarios help explain sensitivity; they do not predict results.
Turn reading into a useful record
Keep three columns in your working notes: the question, the source of the answer and the action still needed. Give each open issue a responsible person. Ask the relevant professional to explain the limits of their review, and preserve assumptions alongside the conclusions.
Before making a commitment
Use this checklist to prepare a more precise conversation. It does not establish rights, condition, value or suitability of any individual property. Obtain the appropriate independent advice for your transaction and confirm current requirements with the responsible authority.
