Potential Rental Income

Potential rental income refers to the total sum of rent that a home owner could receive over the course of a year if their property was completely rented out. Calculating this figure requires one to know the market value of the property to renters and to understand the number of renters the property could hold. This figure is important to home buyers who are looking to turn their new purchase into a money maker. The potential rental income tells them whether it makes sense to purchase the home. In many cases, the person will want the potential rental income to be well over the amount of the mortgage payment. This way, they can make money on the rental property even if they do not completely fill in the rental space right away. This figure also helps these people determine whether it makes sense to live in their new home or rent it out.