Analyze cash flow, ROI, cap rate, and cash-on-cash return. Make informed real estate investment decisions with comprehensive financial projections.
| Metric | Monthly | Annual |
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| Year | Rent | NOI | Cash Flow | Equity |
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Cap rate measures the potential return on a real estate investment. It's calculated by dividing Net Operating Income (NOI) by the property value. Higher cap rates indicate higher potential returns but may also indicate higher risk.
This metric shows the return on actual cash invested. It's especially useful for leveraged investments as it measures returns relative to your down payment and closing costs, not the total property value.
A quick screening tool: monthly rent should be at least 1% of the purchase price. For a $200,000 property, you'd want at least $2,000/month rent. This rule helps quickly identify potentially profitable investments.
DSCR measures a property's ability to cover its debt obligations. A DSCR of 1.25 means NOI is 125% of debt payments. Most lenders require DSCR of 1.2-1.25 for investment property loans.
NOI is the annual income from a property after deducting operating expenses, but before debt service (mortgage payments). It's a key metric for valuing income-producing real estate and calculating cap rate.
Cash flow is the money left over after all expenses, including mortgage payments. Positive cash flow means the property generates income; negative cash flow means you're paying out of pocket each month.