Tools in This Collection
Rental Yield Calculator
Calculate gross and net rental yield and cap rate for any investment property
Cap Rate Calculator
Calculate capitalization rate from net operating income and property value for investment comparison
Cash on Cash Return Calculator
Calculate annual cash-on-cash return as a percentage of actual cash invested
Airbnb Income Estimator
Estimate short-term rental monthly revenue from occupancy rate, nightly rate, and platform fees
DSCR Calculator
Calculate debt service coverage ratio and check if a property qualifies for DSCR financing
BRRRR Calculator
Analyze BRRRR deals: calculate refinance proceeds, cash left in deal, and equity created
House Flipping ARV Calculator
Calculate flip profit from purchase price, rehab costs, ARV, selling costs, and holding period
Real Estate Syndication ROI Calculator
Model passive real estate syndication returns with preferred return, waterfall splits, and IRR
Guides & Articles
Rental and Investment Property Workflow
Real estate investment success depends on running the numbers before signing a purchase agreement, not after. The tools in this cluster cover the full investment property analysis workflow, from initial screening to detailed cash flow modeling.
Step 1: Quick Screening with Yield and Cap Rate
Gross rental yield (annual rent / purchase price) and cap rate (net operating income / purchase price) are the two fastest screening metrics. At 1% gross yield per month (the "1% rule"), a $200K property should rent for $2,000/month to potentially cash flow. Cap rates above 6% in secondary markets or 4-5% in primary markets generally indicate positive cash flow potential after financing. The Rental Yield Calculator and Cap Rate Calculator handle both metrics.
Step 2: Full Cash Flow Analysis
Gross yield and cap rate ignore financing costs. Cash-on-cash return measures actual return on invested equity after debt service. For a property with $250K down, $12,000 in annual pre-tax cash flow after all expenses and mortgage payments, the cash-on-cash return is $12,000 / $250,000 = 4.8%. The Cash on Cash Return Calculator builds this from your actual down payment, interest rate, and expense estimates.
Step 3: DSCR for Investment Property Financing
DSCR (Debt Service Coverage Ratio) lenders qualify the loan based on the property's cash flow, not your personal income — making DSCR loans attractive for investors with multiple properties or self-employment income. Most DSCR lenders require a ratio of 1.20-1.25 (rental income 20-25% above monthly debt service). The DSCR Calculator shows whether a specific property and financing scenario clears the threshold.
Step 4: Advanced Strategies
The BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat) aims to recycle capital by refinancing equity created through renovation. The BRRRR Calculator models the full cycle: purchase price, rehab cost, after-repair value, refinance proceeds, and cash left in the deal. A successful BRRRR recovers most or all of the initial investment through the refinance, enabling the next acquisition without additional capital.
Frequently Asked Questions
What is a good cap rate for rental property?
Cap rates vary by market and property type. In high-demand primary markets (NYC, SF, LA), 4-5% is common. In secondary markets, 6-9% is achievable. In tertiary markets or higher-risk areas, 10%+ occurs. Higher cap rates indicate higher income relative to price — but often come with higher vacancy, lower appreciation, or higher maintenance. Cap rate is most useful for comparing similar properties in the same market.
What is cash-on-cash return and what is considered good?
Cash-on-cash return is annual pre-tax cash flow divided by total cash invested (down payment + closing costs + any initial repairs). A 6-8% cash-on-cash return is generally considered acceptable in most markets. Above 10% is strong. Below 4% may not justify the illiquidity and management burden of owning investment real estate vs other assets.
What is the DSCR minimum for investment property loans?
Most DSCR lenders require a minimum DSCR of 1.20-1.25, meaning rental income must be 20-25% above the monthly principal, interest, taxes, insurance, and HOA payment. Some lenders offer DSCR as low as 1.0 (break-even) or even 'no-ratio' loans for properties in strong markets, but rates are higher. The DSCR Calculator shows exactly where a specific property falls.
What is the BRRRR real estate investing strategy?
BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. The strategy involves purchasing a distressed property below market value, renovating it to increase value, renting it for cash flow, then refinancing at the new (higher) appraised value to pull out invested capital, which is then redeployed into the next property. When executed correctly, an investor can acquire multiple rental properties with limited ongoing capital.
Is Airbnb more profitable than a traditional rental?
Short-term rentals can generate 2-3x traditional rental income in high-demand tourist or business travel markets. However, they also have higher operating costs (cleaning, supplies, platform fees of 14-16%), higher management burden, more vacancy risk, and are subject to local regulations that vary significantly by city. The Airbnb Income Estimator models gross income; compare to your STR-specific expense estimate for a realistic comparison.