The Top 3 Metrics Every Real Estate Investor Must Know

Cap rate is your screening tool: Perfect for quickly comparing properties across markets, but it doesn't account for financing or long-term performance.

DSCR and cash-on-cash reveal actual profitability: These metrics show whether your property will make or lose money with financing—the Hamilton example had a terrible 0.61 DSCR and -10.5% cash-on-cash return.

IRR captures the complete picture: It's the only metric that accounts for the entire investment lifecycle including appreciation, principal paydown, and your exit, showing you can still profit even with negative annual cash flow.