Financial Ratios
By Cindy1 author8 articles
- Rent to Value Ratio (RTV, RTP)A ratio that compares the monthly gross rent to the purchase price or market value.
- Gross Rent Multiplier (GRM)A ratio that shows the number of years it will take for the yearly rent to add up to the purchase price.
- Equity MultipleA ratio that shows the total return on your invested cash if you were to sell a property.
- Break Even Ratio (BER)The minimum occupancy needed to cover all operating expenses and loan payments.
- Loan to Cost Ratio (LTC)A ratio between the loan amount and the acquisition costs of a property.
- Loan to Value Ratio (LTV)A ratio between the loan amount and the market value of a property.
- Debt Coverage Ratio (DCR, DSCR)A ratio that compares the yearly NOI to the yearly loan payments, often used for loan qualification.
- Debt YieldA ratio that compares the yearly NOI to the total loan amount, often used for loan qualification.