eRealInvestor offers real estate investors a powerful and comprehensive list of graphs and tools that allow them to evaluate investment properties. Some of these include:

• Price/ Sq Ft: Price per Square Foot is a commonly used metric to compare properties.
• Rent/ Sq Ft: Rent per Square Foot is another commonly used metric to compare properties.
• Pre-tax Annual Cash-on-cash return: measures the annual total cash received by the investor relative to the total investment in the property, before taxes.
• Post-tax Annual Cash-on-cash return: measures the annual total cash received by the investor relative to the total investment in the property, after taxes.
• Cap rate: the ratio of the net income produced by a property and its price.
• Internal Rate of Return (IRR): the annualized effective compounded return rate which can be earned on the invested capital.
• Gross Rent Multiplier (GRM): the ratio of the price of a property to its annual rental income before all expenses, including property taxes, property management, insurance, etc.
• Rent Ratio: the ratio of the monthly rental income for a property to its price.
• Pre-tax Annual Cash Flow: measures the total cash returned to the investor during the calendar year, after financing costs, but before taxes.
• Pre-tax Monthly Cash Flow: measures the total cash returned to the investor during the average month, after financing costs, but before taxes.
• Post-tax Annual Cash Flow: measures the total cash returned to the Investor during the calendar year, after financing costs and taxes.
• Post-tax Monthly Cash Flow: measures the total cash returned to the investor during the average month, after financing costs and taxes.
• Equity in Property: measures the total equity owned by the Investor in the current year, including property value escalation, repaid loan principal, and property improvements.
• Future Property Value: represents the Fair Market Value of the property in the current year, assuming property improvements and value escalation.
• Cap Rate Implied by NOI/ Price: derives the property “Cap Rate” by dividing the property’s actual Net Operating Income (NOI), or income after expenses and taxes by the property price.

You can visit our glossary for information on some of these investment terms.

This entry was posted on Friday, May 9th, 2008 at 5:49 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.