Basically what you are left with after adding back all these items is the gross rent less any deducted expenses, and then the PITI and HOA dues are subtracted to come up with a net monthly net income figure to use to qualify.

You have to subtract the land value and depreciate the building over 27.5 years. 

To calculate effective rent, subtract the HOA fee from rent and then add back the value of the things that it covers for the property owner, like siding, windows, roof etc.

Because after I subtract everything my offer is typically 50-60% which obviously isn’t the most enticing.

The land contract note amount will be the balance owed after the above credits have been subtracted.

You take all the revenue of the property (the rents) and subtract all the known and projected expenses. 

From that I’ll subtract CAPEX (2% on new builds, 5% on older) and leverage costs so I can get down to a pre-tax cash flow.  

We always have a few rehabs in the loop to keep the machine running without any downtime.For profits, we calculate all our rehab projections, taxes, insurance, utilities all holding closing and selling costs as well as  interest on a six month hold period then we add in 20k for profit subtract from sell price and that's the max we will pay for a house.

In fact, when I buy a rental house, the value that we use in calculating the depreciation has to take the purchase price and subtract from that a land value - because there is no depreciation for the land.This is the difference that I think you are looking for ...

Thomas, perhaps there are some policies that work as you described, however I have personally seen whole bunch of policies that work as follow:1) If you have outstanding loan it will be subtracted from death benefits2) If you pass away the insurance company only pay out death benefits and keeps the cash value.