rentsincome

Rentsincome, also commonly referred to as rental income, is the regular payment received by an owner in exchange for allowing another party to use real estate or other assets. It is a recurring cash flow derived from leasing property or assets rather than a one-time sale, and is a key component of personal finance and real estate investment.

Sources of rentsincome include residential properties (apartment buildings, single-family homes), commercial properties (retail, office space), and other assets that can be leased, such as equipment or vehicles. The term encompasses gross rent, which is the total payments due under lease terms, and net rent, which subtracts operating expenses.

Calculation and metrics commonly used in evaluating rentsincome include gross rent, net rent, and net operating income (NOI). NOI equals gross rent minus operating expenses (such as property management, maintenance, insurance, and property taxes). Cash flow is NOI minus debt service. Real estate investors also use the capitalization rate (cap rate) as NOI divided by property value to assess potential returns.

Tax and accounting treatment varies by jurisdiction but generally treats rentsincome as taxable. Deductions commonly allowed against rental income include mortgage interest, property taxes, insurance, maintenance and repairs, and depreciation for eligible assets. Losses may be subject to regional rules about offsetting other income.

Economic context distinguishes rentsincome from the broader concept of economic rent, which in economics refers to income earned above the resource’s opportunity cost. Market dynamics—such as vacancy rates, tenant credit risk, lease terms, and rent controls—influence the level and stability of rentsincome.

See also: rental income taxes, real estate investing, capitalization rate, depreciation, property management.