How to Analyze a Rental Property
Successful real estate investing isn't about guessing; it's about math. This tool helps investors determine if a property is a "Deal" or a "Pass."
Key Metrics Explained
- Cash Flow: The profit left in your pocket after paying all expenses (Mortgage, Taxes, Insurance, Repairs).
- Cash-on-Cash Return: Your annual profit divided by the actual cash you invested (Down payment + Closing costs). A good target is 8-12%.
- Cap Rate: The rate of return on a real estate investment property based on the income that the property is expected to generate.