BRRRR Return
Measures what percentage of original cash invested is recovered through a cash-out refinance after the Buy, Rehab, Rent, Refinance, Repeat cycle.
Cap Rate
The ratio of a property's net operating income to its market value, expressing the expected return on an all-cash real estate investment.
Cash-on-Cash Return
The ratio of annual pre-tax cash flow to total cash invested, measuring the leveraged yield on a real estate investment.
DSCR
The ratio of a property's net operating income to its annual mortgage payments, used by lenders to determine whether a property qualifies for financing.
50% Rule
A rule of thumb estimating that approximately 50% of a rental property's gross rent is consumed by operating expenses — excluding mortgage payments.
Gross Rent Multiplier
The ratio of a property's purchase price to its annual gross rental income, used as a quick screening tool before deeper due diligence.
NOI
Annual gross income from a property minus all operating expenses, excluding mortgage payments, taxes on income, depreciation, and capital expenditures.
1% Rule
A quick-filter rule that says monthly rent should be at least 1% of the purchase price for a rental property to generate positive cash flow.
2% Rule
A strict real estate screening rule stating monthly rent should be at least 2% of the purchase price, targeting high cash-flow investment properties.
Vacancy Rate
The percentage of available rental time during which a property or unit is unoccupied and generating no rental income.