12 Real Estate Investment Calculations Every Investor Should Know
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Looking for a one-stop shop to all of the basic real estate investing calculations you’ll ever need?
Then you’re in the right place!
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But sometimes the acronyms and jargon can get in the way.
The math behind real estate investment calculations is really pretty simple.
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Don’t worry, we’ll cut through all the clutter and simplify all the numbers you’ll need to know.
These are the calculations I use in my own real estate investing.
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1. Net Operating Income (NOI)
Net Operating Income is the income left after accounting for your operating expenses and BEFORE debt service.
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2. Capitalization Rate
(Cap Rate)
It essentially tells you the rate of return of a property if you bought it for cash.
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The Rent to Cost Ratio is another quick way to compare similar properties to each other.
3. Rent to Cost Ratio
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The Gross Rent Multiplier is another way of looking at the rent to cost ratio, and basically gives you the same information in a different format.
4. Gross Rental Multiplier (GRM)
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