What Is Rental Cash Flow? How the Math Works
Cash flow is what's left of the rent after operating expenses and the loan payment. Here's the formula, each line item, and a fully worked example.
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15 articlesCap Rate Explained: Formula, Examples and What It Measures
Capitalization rate compares a property's net operating income to its price. Here's how to calculate it, what it captures, and where it falls short.
Cash-on-Cash Return Explained
Cash-on-cash return compares a year of pre-tax cash flow to the cash actually invested. Here's the formula, what counts as cash invested, and a worked example.
ROI in Real Estate: Measuring Total Return on Cash Invested
Real estate ROI can combine cash flow, principal paydown and appreciation. Here's how each piece is calculated and how they add up over a holding period.
Gross vs. Net Rental Yield: What Each One Measures
Gross yield divides annual rent by price. Net yield subtracts expenses first. Here's how to calculate both and why the gap between them matters.
Net Operating Income (NOI): What Goes In and What Stays Out
NOI is a property's income after vacancy and operating expenses, before debt service. Here's exactly which items belong in it, with a line-by-line example.
DSCR Explained: The Debt Service Coverage Ratio
DSCR divides net operating income by annual debt payments. Here's how it's calculated, how lenders use it, and how changes in rent, rate or loan size move it.
The BRRRR Method, Step by Step: Following the Money
Buy, rehab, rent, refinance, repeat. Here's how cash moves through each stage of a BRRRR project, with a full example from purchase to refinance.
How a Mortgage Payment Is Calculated
The monthly principal and interest payment comes from one formula. Here's how it works, how the payment splits over time, and what changes it.
Fix and Flip Math: Every Cost Between Purchase and Sale
A flip's profit is the resale price minus purchase, rehab, holding, financing and selling costs. Here's how to total each one, with a full worked example.
The 1% Rule: What It Measures and Where It Falls Short
The 1% rule compares monthly rent to purchase price as a quick screen. Here's the math behind it, what it implies, and what it leaves out.
The 50% Rule for Rental Operating Expenses
The 50% rule estimates that about half of a rental's gross rent goes to operating expenses. Here's how it works, where it comes from, and when it misleads.