How to Evaluate a Rental Property Deal in 10 Minutes with Google Sheets
As a retail real estate investor, you've probably stared at a property listing wondering:
"Is this a good deal?"
Here's a simple 3-step framework I use to analyze any rental property deal.
Step 1: Get Your Numbers Right
Download a copy of the Rental Property ROI Calculator (links at bottom).
Input: purchase price, down payment, interest rate, expected rent, vacancy, management fees, taxes, insurance, maintenance. That's it.
Step 2: Check Your 3 Key Metrics
- Cap Rate = NOI / Purchase Price → target 6%+
- Cash-on-Cash Return = Pre-tax cash flow / Total cash invested → target 8%+
- Debt Service Coverage Ratio (DSCR) = NOI / Debt service → target 1.25+
Step 3: Run a 5-Year Projection
See if the deal still works with 3% rent growth and 2% expense inflation. Calculate your IRR. If all 3 core metrics are green, you've got a deal.
I built a free Google Sheets template that does this automatically — just plug in the numbers and it spits out Cap Rate, Cash-on-Cash, IRR, and DSCR instantly. Also compares up to 5 properties side-by-side.
Grab the template here: Rental Property ROI Calculator — Google Sheets
Happy investing! 🏠
Note: This is not financial advice. Always verify with your accountant or real estate professional.
