Key Real Estate Numbers To Look For

“Real estate is a numbers game." We've been hearing this again and again from so many investors. What are the key numbers to look for?

I decided to develop a set of key numbers that the successful investors have been looking for in a property and a market. Below is my summary based on 50+ podcasts from BiggerPockets and the book ”The Complete Guide to Buying and Selling Apartment Buildings” by Steve Berges. 

It has been a convenient rule of thumb for me to quickly and effectively analyze deals. Hope you all benefit from it!

Numbers to look for in a market:

New developments, economic driver

Population growth>9.7%

New job market, growing jobs/decreasing unemployment rate

Poverty level under 13%

High rental populous 40-50%

High occupancy rate >90%

Class C+ properties in B neighborhood

1/3 median household income > rent

Growing and sustainable rent

High enough monthly rent for double-digit cap rates

Good neighborhood: good school district, convenient shopping

Low crime rate

Not in flood zone

Low enough purchase price, tax, insurance

Numbers to look for in a property:

12% Cap rate 8-12%, average 10%

1% Monthly rent to Purchase price ratio

7 GRM=Annual gross rent multiplier: 7 or lower

Low Price/sqft

Below-market rate: rent/sqft, rent/unit

Opportunities to reduce cost

A fixer-upper: appears to be in disrepair but just needs a little cosmetic improvement: paint, landscaping, fencing, floor

Good rule of thumb:

Good Cap rate 8-12%, average 10%

Good Rent to Value ratio 1%

Total Operating Expense= 40-60% Gross Income, 50%

NOI= 50% of Gross Income on average

GRM=Annual gross rent multiplier (Purchase price/ Gross annual rent): 7 or lower

Repairs& Maintainance 10-15%

Property Tax 5%

Insurance 2%

Management 5%

What are the most important numbers you look for?