Financial Ratios
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.