Nine tools for underwriting a deal before you commit capital.
Rental property analysis depends on getting operating expenses right, and that's where most first deals go wrong. Vacancy, maintenance, capital expenditure reserves, and property management typically consume 35–50% of gross rent. A deal that pencils on rent minus mortgage almost always loses money in practice.
Which metric matters depends on how you're financing. Cap rate ignores financing entirely and compares properties on their own merits. Cash-on-cash measures return on the money you actually put in. DSCR is what the lender cares about, since it determines whether the deal qualifies at all.
Full analysis including operating expenses, vacancy allowance, and reserves. Start here before using any of the single-metric tools.
Cap rate compares properties independent of financing. Cash-on-cash reflects leverage and shows return on your actual cash in. Yield measures rent against price.
DSCR loans qualify on the property's income rather than yours. Most lenders want 1.20–1.25 minimum; interest-only structures raise the ratio by removing principal from the debt service figure.
BRRRR depends on the refinance appraisal supporting your rehab spend. House hacking offsets your own housing cost with tenant rent. Flips live or die on accurate rehab budgets and holding costs.
Short answers to what people ask most before picking a tool.
