Calculating the net worth of a rental property involves determining its overall financial value. For example, a property with a market value of $200,000 and a mortgage balance of $100,000 would have a net worth of $100,000.
Understanding a rental property’s net worth is crucial for financial planning, securing loans, and making informed decisions. Historically, the concept of net worth has evolved alongside real estate investing, becoming an essential metric for assessing property value.