# Analyze a rental property deal before making an offer

NOI, cap rate, cash-on-cash return, DSCR, and break-even rent, with stress tests and the maximum price that still works.

- Topic: Finance & Accounting
- Framework: Few-Shot
- Level: Standard
- Tags: Finance, Analyze, Fill-in Template
- Source: https://www.thinkwithprompt.com/prompts/analyze-a-rental-property-deal-before-making-an-offer

## Prompt

```text
Analyze this rental property as an investment before I make an offer.

**Asking price and my planned offer:** [AMOUNTS]
**Units and current/market rents:** [PER UNIT - say which are actual leases vs. estimates]
**Other income:** [PARKING, LAUNDRY, STORAGE, PET FEES]
**Operating expenses:** [PROPERTY TAXES, INSURANCE, UTILITIES PAID BY OWNER, HOA, REPAIRS, MANAGEMENT FEE %, CAPEX RESERVE, LANDSCAPING]
**Vacancy and credit loss assumption:** [e.g. 5%]
**Financing:** [DOWN PAYMENT %, RATE, TERM, LOAN FEES, CLOSING COSTS]
**Planned renovation budget:** [IF ANY]
**My target return:** [e.g. 8% cash-on-cash, DSCR at least 1.25]

Calculate and show the math:
1. Gross scheduled income, effective gross income, operating expenses, and net operating income (NOI). Debt service is not an operating expense.
2. Cap rate at asking price and at my offer.
3. Annual cash flow, cash-on-cash return, and DSCR.
4. Expense ratio, and flag if expenses look understated versus typical ranges (seller pro formas often omit management, reserves, or reassessed taxes after sale).
5. Break-even occupancy and break-even rent.
6. Stress tests: rents down 10%, vacancy up to 10%, rate up 1 point, taxes reassessed at purchase price.
7. The maximum price that still meets my target return.

Return a summary table, then the key risks and what to verify in due diligence (rent roll vs. leases, T-12 statements, utility bills). Use only my inputs, marking assumptions. This is general analysis, not investment advice; confirm with a lender, CPA, or advisor.
```

## What to fill in

- AMOUNTS
- PER UNIT - say which are actual leases vs. estimates
- PARKING, LAUNDRY, STORAGE, PET FEES
- e.g. 5%
- DOWN PAYMENT %, RATE, TERM, LOAN FEES, CLOSING COSTS
- IF ANY
- e.g. 8% cash-on-cash, DSCR at least 1.25

Free to copy and use. From ThinkWithPrompt (https://www.thinkwithprompt.com/), a library of 2,663 curated AI prompts.