How to Calculate, Property Flip or Hold, Real Estate Investment

Gross Income – Total income of rent received from tenants to pay for the space. Vacancy Rate % – The percentage of time rental income is lost due to a property being not rented. Usually between 5% to 10% of the Gross Income. Other Income – Any...
How to Calculate, Property Flip or Hold, Real Estate Investment

Net Yield – Measures yearly cash flow to the after repair value (ARV). This metric takes into account all of the expenses including the debt service. Yearly Cash Flow ÷ After Repair Value —————————— =...
How to Calculate, Property Flip or Hold, Real Estate Investment

Debt Yield – Measures yearly net operating income (NOI) to the loan amount. This metric is used to determine the risk of a loan. Provides lenders a measure of risk independent of interest rate and amortization periods. Yearly Net Operating Income ÷ Loan Amount...
How to Calculate, Property Flip or Hold, Real Estate Investment

Gross Rent Multiplier (At Purchase) – Measures the purchase price to its annual gross income. The GRM is the number of years it takes to pay for the purchase price via gross income. Purchase Price ÷ Gross Income (1st Year)...