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PropertyU

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Calculation Methodology

PropertyU uses one shared financial engine so the same assumptions are handled consistently across its analysis tools.

Core property calculations

  • NOI: effective gross income minus operating expenses. Financing costs are not operating expenses.
  • Cash flow: NOI minus debt service.
  • Cap rate: NOI divided by the property value or purchase-price basis, multiplied by 100.
  • Cash-on-cash return: annual cash flow divided by total cash invested, multiplied by 100.
  • DSCR: NOI divided by annual debt service.
  • LTV: loan amount divided by property value, multiplied by 100.

Projected sale price

Projected sale price uses the next year's projected NOI divided by the selected exit cap rate. This approach is an estimate, not an appraisal or promise of a future sale price.

Assumptions control the results

Every result depends on the information entered by the user, including rents, vacancy, expenses, financing, renovations, growth, and exit assumptions. Estimates may differ substantially from actual outcomes.

Explore the tools

Deal LabMortgage CalculatorRental Property CalculatorEducational Disclaimer