Calculate monthly cash flow, cap rate, cash-on-cash return, and break-even occupancy for any rental property in seconds.
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Download Richify — It's FreeCap rate measures a property's annual net operating income as a percentage of its purchase price. It helps you evaluate a property's earning potential independent of financing. A $300,000 property with $18,000 in annual NOI has a 6% cap rate. This metric is useful for comparing properties across different price ranges and markets.
Cash-on-cash return shows the percentage yield on the actual cash you invested (your down payment). Unlike cap rate, it accounts for your mortgage financing. If you put $60,000 down and earn $4,200 annually in cash flow after all expenses and debt service, your cash-on-cash return is 7%. This is the metric most investors use to evaluate leveraged deals.
NOI is the property's annual income after operating expenses but before mortgage payments. It includes rent revenue minus vacancy, property taxes, insurance, maintenance, management fees, and HOA. NOI is used to calculate cap rate and is the standard metric commercial lenders use to evaluate property income potential.
Break-even occupancy is the minimum occupancy rate needed for your rental income to cover all expenses, including the mortgage. If your break-even occupancy is 85%, you need the property rented at least 85% of the time to avoid negative cash flow. A lower break-even occupancy means more margin of safety.
Track all these metrics across your entire portfolio with the Richify Real Estate Portfolio Tracker.
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