Property Flip or Hold – How to Calculate Break Even Ratio

Real Estate Investment

Break Even Ratio – Measures what occupancy percentage of the property must be rented to cover all expenses including debt service. Loan Principal & Interest + Taxes + Insurance + Property Management + HOA + Other Expenses ÷ Gross Income...

Property Flip or Hold – How to Calculate Gross Rent Multiplier (At Purchase)

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)...

Property Flip or Hold – How to Calculate Rent to Value (At Purchase)

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

Rent to Value (At Purchase) – Measures the monthly gross income to the purchase price. The higher the rent to value ratio, better the investment. Gross Income ÷ Purchase Price —————————— = Rent to...

Property Flip or Hold — How to Calculate Internal Rate of Return (IRR)

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

Internal Rate of Return — The IRR measures a properties long term profitability by taking into account the annual net cash flow and the change in equity over time. Calculating IRR, the rate of return formula sets Net Present Value (NPV) to zero. With the property...

Property Flip or Hold — How to Calculate Return on Investment (ROI — 1st Year)

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

Return on Investment (1st Year) — The net profit made on an investment to the total investment. (((Equity – Projected Soft Cost) + Cumulative Cash Flow) – Total Investment) ÷ Total Investment...