12 Real Estate Investment Calculations Every Investor Should Know
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!
Don’t worry, we’ll cut through all the clutter and simplify all the numbers you’ll need to know.
Net Operating Income (NOI) is the income left after accounting for your operating expenses and BEFORE debt service.
Net Operating Income (NOI)
The Capitalization Rate (or “Cap Rate” for short) can be used as a simple calculation to compare similar properties.
Capitalization Rate (Cap Rate)
The Rent to Cost Ratio is another quick way to compare similar properties to each other.
Rent to Cost Ratio
The Gross Rent Multiplier (GRM) is another way of looking at the rent to cost ratio, and basically gives you the same information in a different format.
Gross Rental Multiplier (GRM)
DSCR is calculated by taking our friend, Net Operating Income (NOI) and dividing by the debt service (principal plus interest).
Debt Service Coverage Ratio (DSCR)
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