Updated 8/30/2021 – How do you analyze rental properties? In other articles, I showed how to run the numbers with back-of-the-envelope analysis, including the super-simple one percent rule. But the most well-known rental analysis tool I use is something called a cap rate. In this article, I’ll explain what a cap rate (aka a capitalization [Continue Reading]
How to Calculate Internal Rate of Return (IRR) For Real Estate Investing
This video explains what an internal rate of return (IRR) is and how you can use it to evaluate real estate investments (including how to use the formula in an Excel or Google Slides spreadsheet). You’ll also get practical examples of both unleveraged and leveraged internal rates of return and the pros and cons of [Continue Reading]
How to Calculate Cash-On-Cash Return (With Detailed Examples)
One of the most important reasons to invest in rental properties is cash flow. And one of the simplest ways to measure cash flow is a formula called the cash-on-cash return (CoC for short). In this article, I’ll explain what cash-on-cash return is, when to use it (and when not to!), and how cash-on-cash return [Continue Reading]
How to Buy Good Real Estate Investments, Not Trophy Houses
Early in my career, Jack Miller was one of my favorite real estate investing teachers. He passed away in 2009, but I still reread a lot of his old books and newsletters, like the book Success Secrets (here’s my book review). Jack taught a lot of classic lessons. But one that stuck with me, [Continue Reading]
The One Percent Rule – Quick Math For Positive Cash Flow Rental Properties
The one percent rule is an analysis tool used by real estate investors to quickly screen potential rental properties. I briefly covered the one percent rule in How to Run the Numbers Using Back-of-the-Envelope Analysis. But in this article I’ll go into more depth about what it is, when to use it (and when not to!), [Continue Reading]
How to Confidently Buy An Investment Property – My Go, No-Go System
Have you ever been afraid or uncertain about a decision to buy an investment property? When you’re spending hundreds of thousands of dollars on one purchase, these feelings are normal! The question is how you respond to the fear and uncertainty. Do you slip into analysis paralysis where you’re frozen and never make a decision? [Continue Reading]