Question 1

What metrics does the rental property analyzer calculate?

Accepted Answer

The analyzer calculates: Net Operating Income (NOI), monthly and annual cash flow, Debt Service Coverage Ratio (DSCR), cap rate, cash-on-cash return, and total ROI including equity paydown and appreciation — all from a single set of property inputs.

Question 2

What is a good DSCR for a rental property loan?

Accepted Answer

Most lenders require a minimum DSCR of 1.20–1.25 for rental property loans. A DSCR of 1.25 means the property generates 25% more income than needed to cover debt service. DSCR above 1.25 earns better rates; below 1.0 means negative cash flow relative to debt payments.

Question 3

How do I analyze a rental property deal?

Accepted Answer

Start with the purchase price and loan terms to calculate your monthly payment. Then input realistic rent (not optimistic projections) and all operating expenses including vacancy, taxes, insurance, management, and maintenance. The key metrics to evaluate: cash flow positive, DSCR above 1.20, and cap rate in line with your market.

Question 4

What expenses should I include in a rental property analysis?

Accepted Answer

Include all recurring operating costs: property taxes, insurance, property management (8–12% of rent), repairs and maintenance (budget 1% of value/year), vacancy (5–10%), HOA fees, utilities if landlord-paid, and any other regular expenses. Do NOT include mortgage payments in operating expenses — they are a separate line below NOI.

Question 5

What is a good cap rate for a rental property?

Accepted Answer

A good cap rate ranges from 4% to 10% depending on your market. Primary markets (NYC, LA, SF) typically trade at 4–6%. Secondary markets see 5–7%. Tertiary or value-add markets see 7–10%+. The right cap rate depends on your risk tolerance and local market norms, not a universal benchmark.

Rental Property Analyzer

Monthly P&L

Investment Summary