📊 Rental Property Analysis Generator — Result
Generated on June 25, 2026 · Generate your own →
Rental Property Investment Analysis — Dallas, TX
Executive Summary
This investment opportunity represents a significantly underperforming asset that fails to meet basic cash-flow requirements for a standard rental portfolio. With a negative monthly cash flow of $1,213 and a Cash-on-Cash return of -20.79%, the property is a "net-loss" asset that requires heavy monthly subsidies from the investor. Recommendation: PASS.
Key Metrics Dashboard
| Metric | Value | Benchmark (Target) |
| :--- | :--- | :--- |
| Purchase Price | $350,000 | N/A |
| Cap Rate | 2.23% | 4.5% – 6.0% (Dallas SFR) |
| Cash-on-Cash Return | -20.79% | 8% – 12% |
| Gross Rent Multiplier | 17.7x | 12x – 14x |
| Monthly Cash Flow | -$1,213 | Positive > $200 |
| Rent-to-Price Ratio | 0.47% | > 0.8% – 1.0% |
Cash Flow Analysis
The property is currently in a "negative carry" position, meaning the operating income does not cover the debt service and operating expenses.
* Monthly Gross Rent: $1,650
* Monthly Operating Expenses: $1,000 (Includes taxes, insurance, maintenance, and management)
* Monthly Net Operating Income (NOI): $650
* Monthly Debt Service (P&I): $1,863
* Total Monthly Cash Flow: -$1,213
* Total Annual Cash Flow: -$14,556
Investment Returns
* Cap Rate (2.23%): This is significantly below the current "risk-free" rate (10-year Treasury yields). An investor is essentially accepting a lower return than a savings account while taking on the risk of physical real estate.
* Cash-on-Cash Return (-20.79%): At this rate, the investor loses their entire $70,000 down payment in less than 5 years through monthly operating deficits.
* Gross Rent Multiplier (17.7x): This indicates the property is overpriced relative to the income it generates. In the Dallas market, a GRM of 17.7 is more typical of high-end luxury condos or speculative plays rather than stable cash-flow investments.
Market Assessment: Dallas, TX
Dallas remains a high-demand market with strong population growth and a diverse economy. However, the market is currently experiencing a "yield squeeze" where home prices have outpaced rent growth.
* Vacancy Rates: Generally stable (approx. 5-7%), but high supply in certain submarkets is cooling rent growth.
* Rent Growth: Cooling from pandemic highs; 3% is a realistic long-term expectation.
* Taxes: Texas has no state income tax, but property taxes are among the highest in the nation, which explains the high $1,000/month expense load on this property.
Risk Factors
1. Negative Carry Risk: The investor must have significant liquidity to cover the $14,556 annual deficit. A single vacancy or major repair (CapEx) could increase this loss substantially.
2. Interest Rate Sensitivity: The 7% interest rate is the primary driver of the negative cash flow. The "spread" between the 2.23% Cap Rate and 7% Debt is a "negative leverage" scenario.
3. Appreciation Dependency: This deal only makes sense if the property appreciates by 6-8% annually to offset the cash losses, which is speculative and risky in a high-rate environment.
4. Tax Assessment Hikes: Dallas County aggressively reassesses property values, which could increase the $1,000 monthly expense and further erode the NOI.
Investment Recommendation
Recommendation: PASS
The numbers provided indicate a fundamentally flawed investment for a rental strategy. To make this deal viable, one of three things must happen:
1. Price Reduction: The purchase price would need to drop to approximately $160,000 to achieve a neutral cash flow at current rates.
2. Rent Increase: Monthly rent would need to increase to $2,863 (a 73% increase) just to break even.
3. Financing: The down payment would need to be significantly higher (approx. 75%) to eliminate the negative cash flow, which would still result in a sub-par 2% return on total capital.
5-Year Projection
*Assumes 3% Annual Rent Growth and 2% Annual Expense Growth.*
| Year | Annual Gross Rent | Annual Expenses | Annual NOI | Annual
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