Is this rental
a good deal?

Cap rate is the property's yearly net operating income (rent minus operating costs like taxes, insurance, vacancy, maintenance and management, but not the mortgage) divided by the purchase price. It shows the return as if you paid all cash. Many first-time investors look for 6% or higher.

Cash-on-cash return is your yearly cash flow after the mortgage divided by the cash you actually put in (down payment plus closing costs). It tells you how hard your own money is working. FirstDoor treats 8%+ as strong and under 4% as weak.

DSCR (debt service coverage ratio) is monthly net operating income divided by the monthly mortgage payment. 1.0 means rent just covers the loan after expenses; lenders usually want 1.25 or higher.

The 1% rule is a quick screen: monthly rent should be at least 1% of the purchase price (a $200,000 home renting for $2,000+). It is a rough filter, not a verdict.

Each deal earns up to 8 points: cash flow (2), cash-on-cash return (2), DSCR (2), cap rate (1) and the 1% rule (1). 6+ is Good, 3–5 is Okay, under 3 is Pass. Low vacancy, maintenance or management assumptions are flagged.

No. FirstDoor is an educational calculator. Always verify rent comps, taxes, insurance quotes and get an inspection before buying.