Blog
Deep dives on rental property analysis, real estate math, and underwriting best practices from TrueCap.
Rental Underwriting
How to underwrite a rental property — cap rate, cash-on-cash, DSCR, NOI, and the pro forma that ties them together.
How to screen a rental property in 60 seconds
A fast rental screen: organize five inputs, review four modeled metrics, and see what still needs checking before a full underwrite.
Updated Sep 28, 2026 · 9 min read
What is a good cap rate? A property-specific framework
There is no universal good cap rate. What the ratio measures, how to compare consistent inputs, and which property-specific evidence to check first.
Updated Sep 28, 2026 · 9 min read
Cap rate vs cash-on-cash vs DSCR: which one actually matters?
Three metrics, three different jobs: a plain-English guide to what cap rate, cash-on-cash and DSCR each measure, when each one matters…
Updated Oct 3, 2026 · 8 min read
Cash-on-cash vs IRR: which one tells the truth?
Cash-on-cash and IRR are both return metrics, but they answer different questions: when each one is the right lens, when each one misleads, and how to use them together.
Updated Sep 28, 2026 · 7 min read
How to calculate NOI (net operating income) on a rental property — 2026 guide
NOI = effective gross income minus operating expenses, before the mortgage — and it's the number cap rate, DSCR, and 5+ unit valuation are all built on.
Updated Sep 28, 2026 · 10 min read
Gross rent multiplier (GRM) explained: how to screen rentals fast (2026)
GRM = price ÷ annual gross rent, a quick rental screen. The formula, a three-listing screen, the cap-rate bridge ((1 − expense ratio) ÷ GRM), how it maps to the 1% rule…
Updated Oct 2, 2026 · 10 min read
How to read a rental property pro forma (and verify its assumptions)
A pro forma is a seller's projection, not a result. How to turn one into numbers you can verify: rent, vacancy, insurance, taxes, maintenance, reserves, management and bad debt.
Updated Sep 28, 2026 · 9 min read
How to spot a bad rental deal in 60 seconds — 7 red flags
Seven red flags that tell you a rental may not pencil, checked before you spend hours on a full underwrite.
Updated Sep 28, 2026 · 8 min read
The 50% rule for rentals — is it still useful in 2026?
The classic 50% rule says operating expenses run about half of gross rent. When it works as a triage tool, when it misleads, and what to use instead.
Updated Sep 28, 2026 · 6 min read
Vacancy rate for rentals: what to assume in 2026 (and why 5% is usually a guess)
Physical vs economic vacancy, the turnover math that derives the number instead of guessing it, what 5 points of vacancy does to cash flow and DSCR…
Updated Sep 28, 2026 · 10 min read
CapEx and maintenance reserves: how much to actually budget for a rental (2026)
Percent-of-rent defaults can understate capex on cheaper properties. The component-lifespan method with illustrative replacement costs, an age-weighted reserve formula…
Updated Sep 28, 2026 · 10 min read
Rental property insurance: coverage, quotes, and underwriting
How to collect property-specific landlord-insurance evidence: landlord (DP-3) versus homeowners coverage, what loss-of-rent coverage protects, the exclusions to compare…
Updated Sep 28, 2026 · 11 min read
The 1% rule for rental property: does it still work in 2026?
The 1% rule says monthly rent should be at least 1% of the price. The GRM bridge (a 1% deal is a GRM of about 8.3)…
Updated Oct 2, 2026 · 10 min read
Break-even occupancy: how much vacancy a rental can survive (2026)
Cap rate tells you what a rental earns; break-even occupancy tells you how much can go wrong before it stops covering its bills.
Updated Sep 28, 2026 · 10 min read
Operating expense ratio (OER): what's a good one for a rental? (2026)
OER = operating expenses ÷ effective gross income, the ratio behind NOI and cap rate. The formula, the four costs that aren't operating expenses (mortgage, depreciation, CapEx, income tax)…
Updated Sep 28, 2026 · 11 min read
Return on equity (ROE) on a rental property: the lazy-equity test (2026)
Cash-on-cash tracks your original down payment forever; return on equity tracks what the equity you hold today is actually earning — and on a rental you've owned a while…
Updated Oct 3, 2026 · 11 min read
2% rule vs 1% rule: which rental screen actually applies in 2026?
The 1% and 2% rules are the same rent-to-price screen with the bar at two heights. The GRM and cap-rate math underneath (1% ≈ a 6% cap at the 50% rule; 2% ≈ 12%)…
Updated Sep 28, 2026 · 10 min read
Cap rate vs gross yield vs GRM: three quotes for the same building — and when each one lies
Gross yield, GRM, and cap rate measure the same income at different depths — two are literally the same fraction flipped.
Updated Sep 28, 2026 · 10 min read
What is a good rental yield? A consistent comparison method
Rental yield depends on the formula and the evidence behind it. How gross and net yield differ, what to verify before you compare two properties, and why consistent…
Updated Oct 2, 2026 · 10 min read
Rental Property Financing
Financing a rental — down payment, PITI, DSCR loans, closing costs, and refinancing — with the math worked out.
PITI explained: the real monthly payment on a rental (2026)
PITI (principal, interest, taxes and insurance) is a rental's real monthly payment. On a $250k rental at 7% with 25% down, taxes and insurance add about $400 a month on top of the loan.
Updated Sep 28, 2026 · 11 min read
How much money do you need to buy a rental property? Cash-to-close worked at $150K, $300K, and $500K
Total cash to buy a rental runs about 1.4 to 1.7x the down payment: about $50,700 for a $150K rental, $89,400 for a $300K and $142,200 for a $500K.
Updated Oct 3, 2026 · 12 min read
How much down payment do you need for an investment property? (2026)
Conventional investment loans start at 15% down on a single-family rental and 25% on a 2–4 unit. Worked cash-on-cash and DSCR math on a $250k rental at 15%, 20% and 25% down…
Updated Oct 3, 2026 · 11 min read
Mortgage points on an investment property: compare the actual quotes
Points trade cash at closing for a lower rate. How to use a lender's written rate-and-fee ladder to compare point cost, payment savings, break-even, DSCR and cash-on-cash…
Updated Sep 28, 2026 · 11 min read
How to refinance a rental property — rate-and-term, cash-out, and DSCR options
How to refinance a rental property: rate-and-term vs cash-out, LTV and DSCR considerations, the break-even math, and five mistakes to avoid.
Updated Sep 28, 2026 · 10 min read
Closing costs on an investment property: build the property-specific stack
Estimate cash to close on an investment property from the lender, title, government, insurer, tax and contract documents.
Updated Sep 28, 2026 · 11 min read
Cash-out refinance vs HELOC on a rental: which pulls equity better in 2026?
Two ways to pull equity from a rental, with different eligibility and terms. How a cash-out refinance and a HELOC work on an investment property…
Updated Sep 28, 2026 · 11 min read
Seller financing and subject-to: creative deals explained (2026)
How seller financing and subject-to deals work, the due-on-sale risk that defines subject-to, where Dodd-Frank does and doesn't apply to investors…
Updated Sep 28, 2026 · 11 min read
Hard money vs DSCR: which loan product is right for your next deal in 2026
Hard money and DSCR loans solve different problems: hard money is short-term capital for a deal you'll rehab and exit; DSCR is long-term capital for a rental you'll hold.
Updated Sep 28, 2026 · 11 min read
Debt-to-income ratio for an investment property: how lenders count rental income (2026)
An illustrative debt-to-income calculation for a rental. Under the common 75%-of-gross-rent method, a $250K rental earning $446 a month over its payment still adds a −$79 monthly debt.
Updated Sep 28, 2026 · 11 min read
Negative leverage in real estate: when borrowing lowers your return (2026)
Leverage raises your return only when the asset out-earns the debt. The number that sets the sign (the loan constant, not the rate), the cap-rate-vs-loan-constant rule…
Updated Sep 28, 2026 · 11 min read
Rental Property Tax
Rental property taxes — depreciation, Schedule E, the 1031 exchange, and the deductions that shelter your cash flow.
Rental property tax deductions — the 14 every investor should know
A Schedule E checklist for rental-property expenses, organized by form line, with worked deduction examples, eligibility limits and links to current IRS guidance.
Updated Sep 28, 2026 · 11 min read
Depreciation recapture on rental property: what to review before a sale
Depreciation lowers your basis every year, and that shapes the tax when you sell. A hypothetical rental sale shows how adjusted basis, gain character…
Updated Sep 28, 2026 · 11 min read
Schedule E for rental property: a line-by-line walkthrough
A line-by-line Schedule E walkthrough with a hypothetical rental: how positive monthly cash flow can still show a loss on paper, recordkeeping prompts for each line…
Updated Sep 28, 2026 · 10 min read
1031 exchange basics for individual rental investors
How a 1031 exchange works: the 45-day identification and 180-day exchange periods, the qualified-intermediary safe harbor, like-kind rules, boot, reverse exchanges…
Updated Sep 28, 2026 · 11 min read
Should you put your rental property in an LLC? (2026)
What an LLC does for a rental (liability protection) and doesn't do (cut your taxes), the due-on-sale risk when you transfer a mortgaged rental…
Updated Sep 28, 2026 · 12 min read
Bonus depreciation on rental property in 2026: the restored 100% deduction and what qualifies
Current IRS guidance restored 100% bonus depreciation for eligible property acquired and placed in service after January 19, 2025.
Updated Oct 2, 2026 · 10 min read
Property tax reassessment: don't underwrite the seller's tax bill (2026)
Copying the property-tax line off the listing can understate your bill: the seller's figure may reflect a capped assessment or an owner-occupant exemption you won't get…
Updated Sep 28, 2026 · 10 min read
How to calculate depreciation on a rental property: the 27.5-year math, step by step (2026)
Rental property depreciation worked end to end on a $250K duplex: depreciable basis with closing costs ($256,000), the land-vs-building split (25% land leaves a $192,000 building)…
Updated Sep 28, 2026 · 11 min read
Investing Strategies
Rental strategies — BRRRR, house hacking, Section 8, rehab, off-market sourcing, and single- vs multi-family.
The BRRRR method in 2026: the complete numbers walkthrough
Buy, rehab, rent, refinance, repeat: one full deal walked start to finish on stated financing assumptions.
Updated Sep 28, 2026 · 11 min read
House hacking explained: how to (almost) live for free in a 2-4 unit
The actual math behind house hacking — FHA 3.5% down, owner-occupant rules, year-2 transition planning, and the deal types that make this strategy work in 2026.
Updated Sep 28, 2026 · 9 min read
Is a duplex a good investment? The same $400,000 building, underwritten as a rental and as a house hack
The same $400,000 duplex underwritten two ways. As a pure rental with 25% down it needs $138,140 of cash and loses $277 a month; owner-occupied with 5% down it needs $58,129.
Updated Oct 3, 2026 · 13 min read
Section 8 rentals: how the math actually works in 2026 (pros, cons, underwriting)
How the Housing Choice Voucher program pays: how to verify payment standards, approved rent and the tenant's share, what inspections involve, payment timing…
Updated Oct 3, 2026 · 11 min read
Single-family vs multi-family rental property — which actually wins?
Single-family vs multi-family compared on cash flow, cap rate, financing, tenants, exit liquidity and capex risk, with an illustrative side-by-side example.
Updated Oct 3, 2026 · 11 min read
How to estimate rehab costs without relying on generic price bands
A rehab-budget framework: document the scope and condition, get local written bids, add permits and carrying costs, and set a disclosed reserve for what you can't see yet.
Updated Sep 28, 2026 · 12 min read
How to find off-market rental properties — 8 sources that actually work
The 8 sources investors use to find off-market rental deals: driving for dollars, direct mail, wholesalers, networking, public records and more.
Updated Oct 3, 2026 · 10 min read
Should I use a property management company? The actual math.
Percent-of-rent fees, lease-up fees and maintenance markups: does paying a property manager still beat managing yourself? The break-even math, plus when to switch either way.
Updated Sep 28, 2026 · 8 min read
House hack underwriting: how to know if a duplex, triplex, or fourplex actually beats renting
House hacking sounds great in a podcast and confusing in a spreadsheet. The honest math: your housing cost vs. renting the equivalent, factoring in down payment, mortgage paydown…
Updated Sep 28, 2026 · 12 min read
Short-term rental underwriting playbook: how to model an Airbnb in 2026
STR cash flow lives or dies on three numbers: ADR, occupancy, and operating expenses. Here's the full playbook for underwriting a short-term rental in 2026 — what data sources to use…
Updated Oct 2, 2026 · 14 min read
The 70% rule for house flipping (and BRRRR): calculate a 70%-rule price screen (2026)
The 70% rule — 70% of after-repair value, minus repairs — as a quick price screen, and what it does under the hood.
Updated Oct 2, 2026 · 11 min read
Markets & Where to Buy
Choosing a rental market — cash-flow vs appreciation, the best states for investors, and city-level snapshots.
Best states for rental property investors in 2026
Ten US states compared for rental investing on property tax, income tax and landlord-tenant rules, and the trade-offs between cash-flow and appreciation markets.
Updated Oct 3, 2026 · 12 min read
Cash flow vs appreciation: which rental strategy actually wins in 2026?
A 10-year side-by-side of cash-flow and appreciation strategies across three market types, the four sources of rental return, and how borrowing costs change the math.
Updated Oct 3, 2026 · 9 min read
Deal Analysis How-Tos
Step-by-step guides to the core rental calculations — cap rate, cash-on-cash, DSCR, ARV, and exit cap rate — with worked examples.
How to calculate cap rate (with worked examples) — 2026 guide
Cap rate = NOI ÷ purchase price. Learn the lender-style NOI convention, how vacancy and operating costs work, where CapEx belongs, and see three worked examples.
Updated Sep 28, 2026 · 7 min read
How to calculate cash-on-cash return on a rental property — 2026 guide
Cash-on-cash return = annual cash flow ÷ total cash invested: the return on the dollars you actually put in.
Updated Sep 28, 2026 · 7 min read
How to calculate DSCR: the formula, a worked example, what counts as good, and DSCR loans
DSCR = NOI ÷ annual debt service. The four steps, a sample rental worked through, what counts as a good ratio, why a lender's DSCR can come out higher or lower than yours…
Updated Sep 28, 2026 · 14 min read
How to calculate ARV (after-repair value): the comps method, step by step (2026)
The number every flip and BRRRR model is built on, and one you cannot simply look up. How to calculate ARV from renovated comps, adjustments and price per square foot, with a worked example…
Updated Sep 28, 2026 · 11 min read
Exit cap rate: how to pick the number that sets your sale price (2026)
The cap rate you assume a future buyer pays sets your projected sale price: exit-year NOI ÷ exit cap rate.
Updated Sep 28, 2026 · 11 min read
How TrueCap's screening bands classify a deal
The cash flow, DSCR, cash-on-cash and (for all-cash deals) cap-rate thresholds behind TrueCap's five screening bands, and how to read them.
Updated Oct 2, 2026 · 10 min read
Due Diligence & Buying
Verifying a deal before you close — rent rolls, appraisals, market-rent estimates, and buying with tenants in place.
How to read a rent roll: verify a rental's income before you buy (2026)
A rent roll is where the seller's story meets the leases — and the gap is the deal. Why a fourplex that "grosses $63,600" is really collecting $42,900…
Updated Sep 28, 2026 · 11 min read
Investment property appraisals: how they work — and what to do when the value comes in low (2026)
How investment-property appraisals work: the forms and the rent schedule, the lower-of rule that turns a $228K appraisal on a $240K contract into a $9,000 cash call…
Updated Sep 28, 2026 · 11 min read
How to estimate rent on a rental property (2026)
Rent is the input every metric leans on. The appraiser's comp-adjustment method with a worked grid, the GRM and 1% cross-checks that bound the number…
Updated Oct 3, 2026 · 11 min read
Buying a rental property with tenants in place: documents, obligations, and below-market rent math
A due-diligence framework for a tenant-occupied purchase: verify the leases, payment history, deposits and local successor obligations, then run the in-place rent math.
Updated Sep 28, 2026 · 11 min read
Tool Comparisons
Side-by-side comparisons of rental analysis calculators, deal-discovery platforms, and landlord software.
Best rental property calculator 2026: 7 tools compared
A 2026 comparison of 7 rental property calculators and tools — TrueCap (that's us, disclosed), DealCheck, BiggerPockets, Mashvisor, Stessa, Excel and Roofstock — on free-tier depth, pricing…
Updated Oct 3, 2026 · 12 min read
Best free rental property calculator 2026: 5 tools that actually work for free
A 2026 ranking of five free rental-analysis tools — TrueCap (that's us, disclosed), DealCheck Starter, Stessa, spreadsheet templates and Zillow's mortgage calculator…
Updated Oct 3, 2026 · 9 min read
Best rental property calculator for BRRRR investors (2026)
A 2026 ranking of the best calculators for BRRRR — TrueCap, DealCheck, BiggerPockets, and what makes a BRRRR-specific calculator different from a standard rental analyzer.
Updated Oct 3, 2026 · 9 min read
Best rental analysis tool for house hackers (2026)
A 2026 ranking of the best calculators for house hackers — TrueCap, DealCheck, BiggerPockets, and what owner-occupant underwriting requires that standard rental calculators miss.
Updated Oct 3, 2026 · 8 min read
Best short-term rental analysis tool 2026: 6 tools STR investors compare
A 2026 ranking of the best STR analysis tools — AirDNA for revenue data, TrueCap for underwriting, Mashvisor for market discovery, plus PMS platforms STR investors evaluate.
Updated Oct 3, 2026 · 10 min read
7 Best DealCheck Alternatives for Rental Analysis (2026)
Seven DealCheck alternatives — TrueCap (that's us, disclosed), BiggerPockets' calculators, Stessa, Mashvisor, RentCast, Rentometer and a spreadsheet — with what each costs and covers…
Updated Oct 3, 2026 · 11 min read
Free BiggerPockets Calculator Alternatives (2026)
Six free alternatives to BiggerPockets' calculators — TrueCap (that's us, disclosed), DealCheck's free Starter plan, Calculator.net, Stessa, RentCast and spreadsheets…
Updated Oct 3, 2026 · 10 min read
DealCheck vs BiggerPockets vs TrueCap: which rental calculator wins?
A 3-way comparison of DealCheck, BiggerPockets Calculator, and TrueCap. Free tier depth, pricing, projections, mobile, and which fits which investor.
Updated Oct 3, 2026 · 11 min read
DealCheck vs Stessa vs TrueCap: which one do you actually need?
A dated 3-way comparison of DealCheck, Stessa and TrueCap. All three analyze acquisitions; Stessa also covers owned-property accounting and operations.
Updated Oct 3, 2026 · 11 min read
Roofstock vs Mashvisor vs PropStream: 3-way deal discovery comparison
Roofstock, Mashvisor and PropStream help you find rental deals in three different ways. How they compare, and where TrueCap fits once you have a property to underwrite.
Updated Oct 2, 2026 · 10 min read
Stessa vs Avail vs Baselane: 3-way landlord ops comparison
Stessa spans acquisition through accounting and operations; Avail emphasizes leasing and rent collection; Baselane combines banking and bookkeeping. How the three compare for landlords.
Updated Oct 3, 2026 · 10 min read
Hostfully vs Hostaway vs Guesty: which STR PMS wins in 2026?
A 3-way comparison of Hostfully, Hostaway, and Guesty: channel managers, automation, pricing tiers, and which fits 1, 10, or 100 short-term rentals.
Updated Oct 3, 2026 · 11 min read
Want the calculator that powers these guides?
TrueCap turns these underwriting concepts into an editable preliminary screen — cap rate, cash flow, DSCR, Buy Box fit, and Pro pre-tax cash-flow/equity projections. Tax and exit modules aren't offered right now. Free to start.
