NOI, cap rate, cash-on-cash, total return, GRM, and the 1% rule from one set of numbers.
This rental earns a 6.3%N2 cap rate, $15,658N1 a year before any mortgage, and returns 1.2%N4 cash on cash after it.
Plan K-0830-year fixed at 6.875% with 25% down. Estimates, not investment advice.
This rental earns a 6.3% cap rate, $15,658 a year before any mortgage, and returns 1.2% cash on cash.
$2,100 a month: each cost, and what is left for you
The same deal read seven ways, then priced backward from the NOI
| Measure | Value | Reading |
|---|---|---|
| Cap rate | 6.3% | 6% or more: typical of rentals that cash-flow |
| Cash-on-cash | 1.2% | Under 8%: thin for the risk |
| Year-one total return | 14.2% | Cash flow, loan paydown, and appreciation |
| Gross rent multiplier | 9.9 | Price ÷ a year's rent; lower is cheaper |
| 1% rule | 0.84% | Misses: rent is under 1% of price |
| Expense ratio | 38% | Operating costs ÷ gross income; 35–50% is typical |
| DSCR | 1.06 | Under 1.20: tight for a lender |
| Target cap rate | Price to pay |
|---|---|
| 5% | $313,160 |
| 6% | $260,967 |
| 7% | $223,686 |
| 8% | $195,725 |
| 9% | $173,978 |
| 10% | $156,580 |
Green prices are at or above your $250,000: you already pay less than that cap rate implies.
Estimates for education only, not investment advice. Cap rate uses the purchase price alone; closing costs and repairs count in cash invested. Use real quotes for taxes and insurance before you offer.