Difficulty Level: Intermediate | Time Required: 15-20 minutes
Purchase Details
Financing Details
Income Projections
Monthly Expenses
Analysis Results
Monthly Cash Flow
Cash on Cash Return
Cap Rate
1% Rule Check
Understanding the Metrics
Monthly Cash Flow
The net income generated by the property each month after all expenses, including mortgage payments, are paid. Calculated as: Total Monthly Income – Total Monthly Expenses.
Cash on Cash Return (CoC)
The annual cash flow divided by the total cash invested, expressed as a percentage. This measures the cash income earned on the cash invested in a property.
Capitalization Rate (Cap Rate)
The ratio between a property’s net operating income (NOI) and its market value. This metric helps compare different properties and markets, independent of financing.
1% Rule
A quick screening tool that suggests the monthly rent should be at least 1% of the purchase price. Meeting this rule doesn’t guarantee a good investment but can be a helpful initial filter.
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