Evaluating an Investment Property
Purchase costs, projected rent, expenses, maintenance, and financing assumptions, estimated line by line before you make an offer.
Run the numbers before you fall for the property
Evaluating an investment property starts with the numbers, not the kitchen. A rental can look like a good buy and still cost you money every month once every expense is counted. The goal before you make an offer is a realistic estimate of what the property will cost you, what it could bring in, and what has to be true for those numbers to hold.
Nothing on this page is a promise of a return. Rents, expenses, rates, and rules change, and every estimate depends on its assumptions. This is also not investment, tax, or legal advice, so bring in a lender, an accountant, and an attorney where their input matters.
Tell Me What You're Considering
What goes into the estimate
- Purchase costs. The price, your down payment, closing costs, and any repairs or updates needed before a tenant can move in.
- Projected income. A rent estimate based on comparable rentals nearby, less an allowance for the months a unit may sit empty between tenants.
- Operating expenses. Property taxes, insurance, any HOA or condo fee, utilities you'll pay as the owner, and a property management company's fee if you won't manage it yourself. I don't offer rental or property management services, so that would be a separate company you hire.
- Maintenance and larger repairs. A monthly reserve for routine upkeep, plus a plan for the big items like a roof or a heating and cooling system. The age and condition of the home drive this number.
- Financing assumptions. Loans for investment properties often require a larger down payment than a home you'll live in, and terms can differ. Your lender sets these, so the analysis uses their numbers, not a guess.
A hypothetical example of the monthly math
Hypothetical example. The figures below are made up to show how the pieces fit together. They are not estimates for any property or area, and your numbers will differ.
- Estimated rent: $3,000 a month
- Vacancy allowance at 5%: minus $150, leaving $2,850 in collected rent
- Mortgage principal and interest: minus $1,750
- Property taxes: minus $350
- Insurance: minus $125
- HOA fee: minus $100
- Routine maintenance reserve: minus $150
- Major-replacement reserve for items like the roof, heating and cooling, and water heater: minus $100
- Fee for a third-party property manager at 8% of collected rent: minus $228
Total monthly costs come to $2,803, so in this example the property's monthly cash flow is about $47. A small change in rent, rate, or repairs could turn that negative, which is why every line needs a real number and a stated assumption.
Monthly cash flow is not the same as your overall return. Overall return also depends on the cash you put in up front, including the down payment, closing costs, and any repairs, plus how much of the loan you pay down, whether the property rises or falls in value, tax effects, and the costs of selling it someday. This example doesn't estimate overall return, and no one can promise one.
Rules that affect a rental here
Local rules belong in the analysis, not after it. Checked against official county sources in September 2026, and subject to change:
- Rental licensing. Prince George's County requires a rental license for single-family rentals, including an inspection, but some cities and towns license rentals themselves. A property's municipality, shown on the state's SDAT real property record, tells you which applies.
- Rent increases. Prince George's County's Permanent Rent Stabilization and Protection Act limits annual increases for regulated units, to 5.7% for July 2026 through June 2027 for most units. Many properties are exempt, including units completed on or after January 1, 2000, and units owned by an individual landlord with five or fewer rental units in the county. The county requires landlords to file an annual report even when a unit is exempt. Confirm how the law applies to the specific property before projecting future rents.
- Community rules. Some HOAs and condo associations limit or regulate rentals. Review the community documents, current fees, and any rental rules first.
Where the numbers differ
Purchase price, rent, fees, and upkeep all vary by community. An older home may cost less to buy and more to maintain. A newer townhome in Westphalia may need less upkeep but carry an HOA fee. We run the estimate for the specific property you're considering.
Start with a specific property or a budget
Tell me what you're considering, and we'll build the estimate line by line. The steps after you choose a property are on my buying process page.
Frequently Asked Questions
Will this rental make money?
No one can promise that. What we can do is build a realistic estimate of purchase costs, projected rent, expenses, reserves, and financing, with every assumption stated. Keep in mind that monthly cash flow and overall return are different measures.
Do I need a license to rent a home in Prince George's County?
Yes, but who issues it depends on where the property is. The county licenses single-family rentals, including an inspection, except in some cities and towns that license rentals themselves.
Does rent stabilization apply to my rental?
It depends on the property. Prince George's County limits annual increases for regulated units to 5.7% for most units from July 2026 through June 2027, but many properties are exempt, including units completed on or after January 1, 2000 and units owned by an individual with five or fewer rentals in the county. Confirm how the law applies before you buy.
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