Real Estate Investing with Coach Carson #462: Is This Rental Actually a Good Deal? (Most Investors Get This Wrong!)
Dec 1, 2025
Explore the nuances of rental property analysis as the host unveils a quick, back-of-the-envelope evaluation method. Discover why most investors misjudge deals that feel right. Learn the critical profit engines: cash flow and equity growth, along with the importance of multiple formulas for deal assessment. Uncover concepts like the rent-to-price ratio, cap rate, and how leveraging debt affects cash flows. Get practical tips on analyzing rentals, building equity, and enhancing your investing skills.
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Filter Deals With Rent-to-Price
- Use rent-to-price ratio as a first-pass filter to compare markets and listings quickly.
- Prefer higher ratios (closer to 1%) for cashflow-focused investing and lower ratios imply harder markets.
Always Start With NOI (No Debt)
- Always calculate Net Operating Income (NOI) excluding mortgage to compare properties.
- Subtract vacancy and all operating expenses (taxes, insurance, management, maintenance, capex) from gross rent.
Cap Rate Links Income To Price
- Unleveraged yield (cap rate) equals NOI divided by total cost and measures return ignoring financing.
- Cap rates vary by market risk and property class; set target caps for your buy box.
