Analyze a buy and hold rental
Enter financing, rent and operating costs in Deal Analyzer to see monthly cash flow, cap rate and debt coverage for a long-term rental.
Use the Buy & Hold strategy when you plan to buy a property and rent it long term. This page covers the sections specific to a rental. The steps every strategy shares are in Run the numbers.
What you need
Section titled “What you need”| Fields | |
|---|---|
| Required | Property Address, City, State, ZIP Code, Purchase Price, Expected Monthly Rent |
Required fields have a red asterisk, and Analyze My Deal stays disabled until they are filled in. If some fields are missing, you see Score withheld instead of a Deal Score, with a banner listing what to add. If you check Cash Purchase, the loan fields are not needed.
Enter your rental
Section titled “Enter your rental”In Deal Analyzer, under Select Your Investment Strategy, select Buy & Hold, then pick the property address under Property Information.
Enter the Purchase Price, Down Payment %, Closing Costs, Interest Rate % and Loan Term (Years). Check Cash Purchase for an all-cash deal. Chat with Lenny opens the financing coach.
Under Rental Information, enter the Expected Monthly Rent. Chat with Annie can help with rent, vacancy and expense assumptions.
Enter Annual Property Tax, Annual Insurance and Property Management % (a percentage of rent). Optionally add Owner-Paid Utilities (Monthly) (Gas & Electric, Water, Sewer, Garbage, Lawn & Snow), the reserves Vacancy Rate % and Maintenance Reserve %, and Monthly HOA.
The button is in the results column on the right.
Multi-unit properties
Section titled “Multi-unit properties”If you set Property Type to Duplex, Triplex, Fourplex, Multifamily (5+ units) or SFR + ADU, a Unit Configuration (Up to 20 Units) section appears with a row for each unit. Enter BR, BA, Rent/Mo (your expected rent) and Market Rent (the current market rate). Select Add Unit to add more, or the remove button on a row to delete one. Once you enter unit rents, Expected Monthly Rent is filled in from their total, shown as Total Monthly Rent.
Check Comps is in the Property Information header. Buy & Hold has no ARV, so comps are for reference and have no Use as ARV button. See Check comps and set ARV.
Read the results
Section titled “Read the results”The Investment Summary shows:
- Monthly Cash Flow and Annual Cash Flow: rent minus expenses and the mortgage. Negative numbers are red.
- Cash-on-Cash ROI: the yearly return on the cash you put in.
- Initial Cash Out of Pocket.
- Cap Rate.
- Debt Coverage Ratio: shown as a multiple such as 1.25x, or N/A on a cash purchase.
A Deal Summary card shows your Total Investment. Two sections open and close below: Purchase Breakdown and Rental Income & Expenses (Monthly), which runs from Monthly Rent and Vacancy Loss through to Total Expenses.
The badge next to the score reads Excellent Deal, Good Deal, Fair Deal or Poor Deal. See Deal Score for how to use it.
Save the deal to your pipeline
Section titled “Save the deal to your pipeline”Select Save to Pipeline, at the top of the page or under the Deal Score. Fill in every required field first.