Gross yield: A yield on investment property before any expenses. This is calculated as annual rent divided by purchase price.
Cap rate: Similar to gross yield but includes all of your expenses (except mortgage payment). This is calculated as net operating income divided by purchase price. Generally, a lower cap rate equates to a higher quality property.
Cash-on-cash return: Cash income earned on the cash invested. This is calculated as annual cash flow divided by initial cash invested.
Annualized return: Estimate of the value the investment generates over the time period for which you own it (including cash flow and appreciation).
Every investor has unique goals and objectives. We have guides designed to help you define your investment needs and best practices for honing in on markets and properties that fit your “buy box.” Check out our Rooftalk “Top Tips for Analyzing Properties” webinar here: https://youtu.be/W9v1PEM6HMA.
Both gross and net yield are metrics aimed at capturing the return on your investment. The difference: gross yield focuses on the total income generated and does not incorporate expenses, whereas net yield accounts for expected operating costs.
Appreciation is a prediction of value based on current and anticipated market conditions and home condition. These estimates may be influenced by many factors, some specific to the local market and some related to the broader economy. Experienced professionals in in the residential investment industry produced the appreciation forecasts provided. Investors are encouraged to use the financial calculator on the property details page to explore how changing the assumptions, such as down payment and interest rate, will impact projected appreciation.
For Roofstock Exclusive listings, an estimate is provided to Roofstock by the local property manager during the certification process. The Rent Guarantee applies to the market rent estimated provided by our local property management partner.
For Roofstock Select listings, the market rent is based upon an analysis of comparable properties. When a buyer's offer has been accepted, during the contingency period, our local property manager partner provides a rent estimate. The Rent Guarantee applies to the market rent estimated provided by our local property management partner.