Finance
Rental Property ROI
Three numbers every landlord needs: cash flow (monthly profit), cap rate (return ignoring financing), and cash-on-cash (return on your actual cash invested).
FAQ
What's a good cap rate? +
5-7% in low-cost markets, 4-6% in major metros, 7-10%+ in distressed/emerging areas. Higher cap = higher cash yield but often more risk.
What's the 1% rule? +
Monthly rent should be at least 1% of purchase price. Hard to find in 2026 markets — 0.7% is more realistic. Below 0.6% you're betting on appreciation.
Why budget 8% maintenance + 8% management? +
Even self-managed properties spend ~1 month/year on issues. PM saves your sanity at 8-10% of rent. Maintenance reserve for big repairs ~5-10% rent.