Cash Flow & Returns

Tools

DSCR tells you whether a lender will fund the deal. This tells you whether the deal is worth funding. Full income waterfall to NOI, cap rate, cash-on-cash return, and the largest loan your rent will actually support.

Why the two ratios disagree

The most useful thing this calculator does is show you the gap between what a lender measures and what you actually earn.

A property can post a comfortable 1.20 DSCR and still bleed cash every month, because DSCR treats gross rent as if it arrives twelve times a year with nothing breaking. That gap is not a flaw in the product — it is a reminder that lender approval is a financing test, not an investment thesis.

Benchmarks worth arguing with

• Vacancy 5–8% in a stable metro. Use 10% or more in a market with soft absorption or a heavy student or transient tenant base.
• Management 8–10% of collected rent on single-family and small multifamily. Self-managing does not make this zero — it makes it your unpaid labour, and it makes the property harder to value on exit.
• Maintenance and CapEx 8–15% of gross. On a pre-1970 building with original systems, budget the top of that range and expect to exceed it in year one.
• Cap rate is only meaningful against local comparable sales. A 7% cap is strong in Westchester and unremarkable in parts of the Midwest.

Estimating tool for education only. Not a quote, pre-approval, or loan commitment, and not investment, tax, or legal advice. Operating assumptions are defaults, not predictions — replace them with your own market data.