Rent Yield

Stress-test cash flow, debt coverage, and break-even points.

Verdict

NO BUY

-$328 /mo

Cash flow fails at current debt and expense assumptions.

Cash Flow-$328/mo

Cap Rate5.1%

Cash-on-Cash-4.2%

DSCR0.85

Cash flow waterfall

Gross monthly rent$2,800

-Vacancy (6%)-$168

=Effective gross income$2,632

-Operating expenses-$811

-Debt service-$2,149

=Cash flow-$328

Sensitivity

drag to stress test

Rent $2,800 Rate 6.5% Vacancy 6% Price $425,000

At $3,179 rent, cash flow reaches $0/mo.

At 3.5% rate, DSCR reaches 1.20.

At $360,215 price, current rent breaks even.

Deal math

Effective gross income$2,632

Operating expenses$810.56

Debt service$2,149.03

Monthly cash flow$-327.59

Cap rate5.14%

Cash-on-cash-4.2%

DSCR0.85