The fastest screening tool. Tells you how many years of gross rent it takes to recoup the purchase price — before any expenses. Use it to immediately filter listings. Lower is better. Does not account for operating costs, so always pair with cap rate.

Example: $300,000 property at $3,000/mo gross rent = GRM of 8.3. At $470,000 for the same rent = GRM of 13.1. The first is worth investigating. The second probably isn’t.

The true income the property produces before debt service. It strips out all costs of running the property — vacancy, management, insurance, taxes, maintenance — but deliberately excludes your mortgage. NOI measures property performance independent of financing.

Sellers always lead with gross rent because it’s the biggest number. NOI is what you actually earn. Typical operating expenses consume 40–55% of gross rent on a leveraged property.

What the property would yield if you paid all cash — no mortgage. The standard metric for comparing properties apples-to-apples because it’s financing-agnostic. A 7% cap rate means you’d earn 7% annually from operations on a cash purchase.

Cap rates and values move inversely: when cap rates compress, values rise. “The market is trading at a 5 cap” means prices are high relative to income — common in hot markets.

The metric that actually reflects your personal return. Unlike cap rate, cash-on-cash accounts for your financing. It measures return on the actual dollars you deployed — down payment plus closing costs.

With a VA loan at 0% down, you’ve invested almost nothing in equity, so even a small positive cash flow produces a high CoC return. This is the leverage amplification working in your favor. Overpaying destroys CoC even when the property’s fundamentals are unchanged.

How comfortably the property’s income covers the mortgage. A DSCR of 1.0 means rent exactly covers the debt — break even. Above 1.0 means positive cash flow. Below 1.0 means you’re subsidizing the mortgage from your own pocket every month.

Lenders typically require a minimum DSCR of 1.20–1.25 for investment property loans. As a remote landlord, you want buffer — one vacancy or repair can push a 1.05 DSCR property into shortfall quickly.

The simplest multifamily sanity check. Dividing total price by rentable units lets you compare a duplex to a triplex to a fourplex without confusion. In Cincinnati’s B-class neighborhoods a well-priced unit should cost $130K–$180K per door. Above $200K per door means you need top-of-market rents to justify the price.