Downtown Multi-units in Portland Maine
Buyers & Sellers
Mortgage Calculators
Understanding 1031
Financial Ratios

Veronica Schneider - Real Estate Broker

Veronica Schneider
Green Tree Realty
Broker

Office: (207) 772-4242
Cell: (207) 838-4034
Fax: (207) 772-4244

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Common Real Estate Investment Financial Ratios

Capitalization Rate (Cap Rate)

Net Operating Income (NOI) / Sales Price

Net Operating Income = $50,000
Sales Price = $800,000

$50,000/$800,000 = 0.0625 = 6.25%


Cash Return on Investment (Cash ROI)

Remaining Cash after Debt Service / Cash Investment


Total Return on Investment (Total ROI)

Remaining Cash after Debt Service + Principal Reduction / Cash Investment


Debt Service Coverage Ratio (DSCR)

Net Operating Income (NOI) /Debt Payment


Gross Rent Multiplier (GRM)

Purchase Price / Gross Scheduled Income