Rental Property Analyzer
Full rental investment analysis: cap rate, NOI, cash-on-cash return, GRM, and monthly cash flow.
Understanding Rental Property Metrics
Cap Rate (Capitalization Rate) = NOI / Purchase Price. It measures the return on a property assuming no debt. A cap rate of 6%–8% is generally considered healthy in most markets. Higher cap rates often indicate more risk or lower-cost markets.
Cash-on-Cash Return = Annual Cash Flow / Total Cash Invested. This is the most relevant metric for leveraged investors because it accounts for your mortgage payments and measures actual cash yield on the money you put in. Target 8%+ for a solid investment.
Gross Rent Multiplier (GRM) = Purchase Price / Annual Gross Rent. A quick screening metric — lower is generally better. GRM of 10–12 is a rough benchmark (divide 12 / GRM to get rough gross yield %). It ignores expenses, so always follow up with cap rate and CoC.
NOI (Net Operating Income) = Gross Rent × (1 − vacancy rate) − all operating expenses excluding debt service. It's a pre-financing metric used to compare properties regardless of financing structure.