Define Investment Strategy
1-2 weeksChoose between direct rental properties, REITs, or crowdfunding based on capital, time, and risk tolerance.
Field context
This workflow is part of 4 niche fields
Free step-by-step real estate investing for aspiring landlords. Plan real estate investing with calculators and checklists covering define investment.
Choose between direct rental properties, REITs, or crowdfunding based on capital, time, and risk tolerance.
Calculate cap rate, cash-on-cash return, and cash flow for rental properties using local market data.
Compare investment property mortgages (typically 20-25% down, higher rates) and factor in closing costs.
Track income, expenses, depreciation, and vacancy rates; consider property management at 8-10% of rent.
Calculate cap rate and cash-on-cash return for rental deals.
Model investment property mortgage payments and DSCR.
Compare loan terms across lenders for investment properties.
Estimate tax impact of rental income and depreciation.
Key formulas for evaluating US rental properties.
| Metric | Formula | Good Target |
|---|---|---|
| Cap rate | NOI ÷ Price | 6-10% |
| Cash-on-cash | Cash flow ÷ Cash invested | 8-12% |
| 1% rule | Rent ÷ Price | ≥ 1% monthly |
Public REITs like VNQ provide diversified real estate exposure without the $50K+ down payment and tenant headaches.
Assume 5-8% vacancy and 1% of property value annually for maintenance — optimistic projections kill deals.
A mediocre house in a growing market outperforms a beautiful house in a declining area.