Just a quick formula to share . . .
Here is how you determine cash flow AFTER taxes:
Take your NET OPERATING INCOME
(subtract) - the ANNUAL DEBT SERVICE
this equals = your CASH FLOW BEFORE TAXES
now, (subtract) - the TAX LIABILITY (savings)
this equals = your CASH FLOW AFTER TAXES!!!!!
With this information, you can perform an investment analysis on a property you are considering acquiring on either a before-tax basis, or an after-tax basis.
No comments:
Post a Comment