Net Spendable Income

Net Spendable Income Definition

Net Spendable Income is the total amount of cash an investor has available for spending in a given time period after deducting all costs and/or expenses associated with an income producing asset such as real property.

Explanation

Generally, investors do this on an annual basis. By taking the gross income your property produces and then deducting all the operating and carry costs for that time period, you end up with the Net Spendable Income.

Be sure to include everything: mortgage, mortgage interest, property insurance, property taxes, utilities, staffing, management, repairs etc. It should be noted however, that when calculating the Net Spendable Income, you typically do not deduct any non-cash depreciation.

 

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