Rental math: rent minus everything

The listing gives you a price. The rental math starts with a different number: what a tenant will actually pay, minus everything it costs to own the place. Most bad rental purchases in the East Valley aren’t bad houses. They’re good houses bought on gross rent instead of net. Here’s the subtraction, in the order it hits your bank account.

Start with the rent you’ll actually get

Not the highest number on a rental site. The rent a comparable home nearby leased for recently, at the condition your house will be in on day one. Then take a month off the year for vacancy and turnover. If the numbers only work at full occupancy, they don’t work.

Now subtract everything

1. Property taxes. Pull the actual bill. Check whether the property sits in a Community Facilities District, a special taxing district whose charges show up on the tax statement or get billed separately. The seller’s disclosure statement asks which.
2. Insurance, priced as a rental, not as your own home.
3. HOA dues, if any. On the standard Arizona lease, HOA dues are the landlord’s line, not the tenant’s.
4. Maintenance. A monthly number for the small stuff, and a bigger reserve for the systems that die in this climate: the AC, the water heater, the roof, the pool pump. The seller’s disclosure statement lists the approximate age of the roof, the heating and cooling, and the water heater, so you can see what’s coming.
5. Repairs you don’t get to postpone. The lease owner’s advisory puts repairs that affect health and safety on a five-day clock after the tenant’s notice, and everything else on ten days. An AC out in July is a five-day problem.
6. Management. Whether you pay a manager or pay yourself in weekends, it’s a line.
7. Leasing and turnover. The cleanup, the paint, and the days the house sits empty between tenants.
8. Your financing. Whatever it costs you to carry the loan goes here. I don’t advise on loans, rates or terms, and I won’t pretend to. That number comes from your lender.
9. Registration and paperwork. A residential rental has to be registered with the county assessor, and the advisory cites a daily penalty for skipping it. If you live out of state, you need an Arizona statutory agent on file too.

What’s left is your net. If it’s negative, you’re buying appreciation and paying for the privilege every month. Say that out loud before you sign, because it’s a legitimate choice only when it’s a choice.

The two lines investors skip

Vacancy and reserves. A house that rents for X and costs Y on paper is cash-flow positive right up until the AC quits or the tenant leaves in December. Put both lines on the sheet before you look at the price. If the deal only works with those two at zero, the deal doesn’t work.

What the East Valley looks like right now

Supply is tight in the core cities. Mesa, Gilbert and Chandler each have about three months of single-family homes for sale, the tightest among the 18 largest Valley cities. Queen Creek is the one East Valley city where the typical sale slowed: 85 days at the median, up from 79 a year earlier (Cromford Report / ARMLS, data 9/15/26, analysis mine).

What that means for the math: in the tight cities, the priced-right homes still move, so don’t build your numbers around a discount you won’t get. The negotiating room is in the listings that sat, and those are the ones where the net might actually pencil. Queen Creek is where I’d look hardest at the days-on-market column before writing.

What I am, and what I’m not

I’ll run this math with you, pull the comps and the rent comps, and tell you when the answer is no. What I won’t do is advise on your taxes, your entity, or your financing. The Arizona purchase contract says brokers don’t give financial, legal or tax advice, and the market conditions advisory says the return on the investment is the buyer’s to judge. So bring your CPA’s questions and your lender’s number, and I’ll bring the comps and the honest subtraction.

If you want the worksheet, text me the address or the price range and I’ll send it.