Investment Property Analysis - Monmouth County, NJ

Comprehensive financial analysis for real estate investments

Successful real estate investing requires thorough financial analysis in Monmouth County, NJ. As your investment analyst serving Monmouth County, Ocean County, and Middlesex County, I provide detailed cash flow projections and ROI calculations throughout New Jersey. Data-driven decisions lead to profitable investments in Marlboro, Manalapan, Freehold, and Holmdel.

Investment Property Analysis - Chris Burns Realtor Monmouth County

📊 Complete Investment Analysis Dashboard

Key metrics every investor must know - Example: $400K property with $3,200/month rent

🏠 Property Overview Purchase: $400,000 Rent: $3,200/mo Down: $80,000 (20%) Location: Monmouth County 1️⃣ Cap Rate (Capitalization Rate) Formula: NOI ÷ Purchase Price NOI: $38,400 (rent) - $18,400 (expenses) = $20,000 Cap Rate: $20,000 ÷ $400,000 = 5.0% Good: 5-10% | Excellent: 10%+ 2️⃣ Cash-on-Cash Return (CoC) Formula: Annual Cash Flow ÷ Cash Invested Annual Cash Flow: -$6,060 (see below) CoC: -$6,060 ÷ $80,000 = -7.6% Target: 8-12% | Negative OK if equity builds 3️⃣ Gross Rent Multiplier (GRM) Formula: Purchase Price ÷ Annual Gross Rent Annual Rent: $3,200 × 12 = $38,400 GRM: $400,000 ÷ $38,400 = 10.4 Lower = Better | Typical: 8-15 4️⃣ Operating Expense Ratio (OER) Formula: Operating Expenses ÷ Gross Income Expenses: $18,400 (taxes, insurance, maint, mgmt) OER: $18,400 ÷ $38,400 = 47.9% Typical: 35-50% | Lower = Better 5️⃣ Debt Service Coverage Ratio (DSCR) Formula: NOI ÷ Annual Debt Service NOI: $20,000 | Mortgage: $25,548/year DSCR: $20,000 ÷ $25,548 = 0.78 Lenders want: 1.2+ | Below 1.0 = Negative cash flow 6️⃣ Break-Even Occupancy (BEO) Formula: (Operating + Debt) ÷ Gross Income Total Costs: $18,400 + $25,548 = $43,948 BEO: $43,948 ÷ $38,400 = 114% Lower = Better | Must stay rented to break even! 7️⃣ Total 5-Year Return on Investment Cash Flow + Equity + Appreciation + Tax Savings Cash flow (5 yrs): -$6,060 × 5 = -$30,300 Equity buildup: $32,400 (principal paydown) Appreciation (3%): $60,000 | Tax savings: $45,450 Total Gain: $107,550 on $80K = 134% ROI! 26.8% annualized return 8️⃣ The 1% Rule (Quick Filter) Monthly Rent ÷ Purchase Price ≥ 1%? Rent: $3,200 | Price: $400,000 Ratio: $3,200 ÷ $400,000 = 0.8% ❌ Fails 1% rule (but may still work!) 1% = Good cash flow | 2% = Excellent Hard to hit 1% in Monmouth County 📈 Overall Investment Rating Negative Cash Flow -$505/month Need to cover shortfall Building Equity $6,480/year principal + appreciation gains Long-Term Winner 134% 5-year ROI Wealth building strategy 📋 Quick Reference: What Makes a Good Deal? EXCELLENT • Cap Rate: 10%+ • CoC: 12%+ • DSCR: 1.5+ • 1% Rule: Passes GOOD • Cap Rate: 7-10% • CoC: 8-12% • DSCR: 1.2-1.5 • 1% Rule: Close PROCEED WITH CAUTION • Cap Rate: <5% • CoC: Negative • DSCR: <1.0 • Bet on appreciation 🎯 Chris Burns Analyzes ALL These Metrics for Every Property! Get comprehensive investment analysis before you buy - Make data-driven decisions 💡 Investment Strategy Note Not all metrics need to be "excellent" - The example above shows negative cash flow BUT strong long-term returns through equity buildup, appreciation, and tax benefits. Your strategy depends on your goals: Immediate income? Focus on CoC + DSCR • Long-term wealth? Focus on Total ROI + Appreciation

📊 All calculations are examples for educational purposes. Chris Burns provides customized analysis for every property based on YOUR specific situation and goals.

Cap Rate Calculation

Net operating income divided by purchase price for Monmouth County properties. Compare cap rates to market averages throughout New Jersey.

Cash Flow Analysis

Monthly income minus expenses for Monmouth County rentals. Positive cash flow ensures sustainable investments throughout New Jersey.

Cash-on-Cash Return

Annual cash flow divided by initial investment in Monmouth County. Measures actual return on invested capital throughout New Jersey.

Gross Rent Multiplier

Purchase price divided by annual rent for Monmouth County properties. Quick comparison tool throughout New Jersey markets.

Operating Expense Ratio

Operating expenses divided by gross income in Monmouth County. Typical ratio 35-45% throughout New Jersey rentals.

Debt Service Coverage

NOI divided by mortgage payment for Monmouth County properties. Lenders require 1.2+ throughout New Jersey commercial loans.

Break-Even Analysis

Minimum occupancy needed to cover expenses in Monmouth County. Understand risk tolerance throughout New Jersey investments.

Appreciation Projections

Historical appreciation rates in Monmouth County neighborhoods. Factor appreciation into total returns throughout New Jersey.

Tax Benefits

Depreciation, mortgage interest, expenses deductible in Monmouth County. Calculate after-tax returns throughout New Jersey investments.

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