Real estate investment analysis
Know the numbers before you buy.
Cap rate, cash-on-cash return, DSCR, IRR and the rest, worked out line by line from your own numbers. Every calculator shows its arithmetic, so you can check where a figure came from before you rely on it.
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Property analysis
Live example- Cap rate
- 7.2%
- NOI ÷ price
- Cash-on-cash
- 3.3%
- Cash flow ÷ down payment
- DSCR
- 1.10
- NOI ÷ loan payments
- Expenses $1,650
- Mortgage $2,319
- Left over $231
Worked example
One property, measured every way.
A $600,000 rental with $5,000 a month in rent, bought with 25% down at 7.25%. Each metric answers a different question, and on this deal they disagree: the building yields 6.0% before financing, while after the loan your own cash earns −0.5% in the first year.
The guides use this same property throughout. Start with how to analyze a rental property.
| Metric | Result | What it answers |
|---|---|---|
| Net operating income | $36,000a year | What the building earns before the loan |
| Cap rate | 6.0% | Its yield at the price |
| DSCR, on NOI | 0.98 | Whether income covers the loan |
| DSCR, on gross rent | 1.31 | The same test, as rental lenders run it |
| Cash-on-cash return | −0.5%year one | What your own cash earns now |
| IRR on your cash | 0.3%10 years | Buy to sale, with nothing changing |
| Value to you | $502,804at 8% | The price that earns your required return |
Calculators
Start from the question you are asking.
Value
What is it worth?
Financing
Will the loan work?
Returns
What does your money earn?
Projects
How long, and how much cash?
Tax
What happens when you sell?
- 1031 exchange calculatorGain deferred, taxable boot, and the two deadlines.
Gain deferred$164,000
Each figure is that calculator's worked example, on the guides' $600,000 property where it applies. They show the shape of an answer; they are not benchmarks.
Guides
Understand the number, not just the answer.
Start hereHow to analyze a rental propertyHow to analyze a rental property in five steps: NOI, cap rate, DSCR, cash-on-cash return and a 1031 exchange, with one property measured by all of them.Read the guide- What is a good cap rate?There is no universal good cap rate. What a cap rate is priced against, where to find your market’s figures, and four checks before trusting one.
- How to calculate cap rateHow to calculate cap rate on a rental property: the formula, NOI divided by value, worked line by line, turned around to value a property, and the traps.
- Cap rate vs cash-on-cash returnCap rate ignores your loan; cash-on-cash return is mostly about it. One property bought three ways shows one cap rate and three different returns.
- What does cash-on-cash return mean?Cash-on-cash return is annual pre-tax cash flow divided by the cash you invested: what counts in each half, and the part of your return it leaves out.
- What is a DSCR ratio?The DSCR ratio compares a property’s income to its loan payment. Two formulas are in use, and one property scores 0.98 on one and 1.31 on the other.
How the numbers are made
Nothing here is a guess dressed as a fact.
- No invented benchmarks.
- No page says what a good cap rate is, or what a lender wants. Where no defensible figure exists, there is a field for yours.
- No forecasts you did not make.
- Rent growth, sale prices and required returns are inputs. The examples start with nothing changing, as a baseline to replace.
- Every sourced figure is dated.
- Tax rates and statutory deadlines carry their source and the date they are next checked, all listed on the sources page.
- Your numbers stay yours.
- The calculators run in your browser. Nothing you type is sent anywhere, and the privacy page says what the site does collect.