Strategy — Buy & Hold
Underwrite rentals the way long-term operators actually think
Cash flow is only half the picture. DealForge underwrites long-term rentals with cap rate, cash-on-cash, DSCR, GRM, and a Section 8 Payment Standard check — so you buy properties that survive the second vacancy and the next rate cycle.
- Cap rate, COC, DSCR, GRM, IRR — all in one view
- Section 8 Payment Standard lookup by zip
- Rent comp engine, not just Zestimate
- DSCR loan modeling with stress tests
- Operating expense ratios with defaults you can override
- 5- and 10-year hold projections with appreciation curves
What it is
Buy and hold is the slow-and-steady wealth strategy: a tenant pays your mortgage, appreciation builds equity, depreciation shelters income, and time does the rest. The underwriting demands realism about expenses, vacancy, and rate exposure — DealForge bakes those into the analyzer instead of trusting an optimistic pro forma.
Who it's for
Long-term landlords
Building a portfolio you'll still own in 20 years.
Out-of-state investors
Quantitative discipline for markets you don't drive.
Section 8 operators
Underwrite to HUD Payment Standards, not market rent guesses.
Syndicators
Standardize underwriting across a deal team.
How it works
- Step 1
Pull rent comps
Or Section 8 Payment Standards by zip + bedroom count.
- Step 2
Estimate operating expenses
Taxes, insurance, capex reserves, vacancy, property management.
- Step 3
Pick financing
Conventional, DSCR, or seller-financed terms.
- Step 4
Review returns
Cap rate, COC, DSCR, GRM, IRR side-by-side.
- Step 5
Stress test
Vacancy, rate, and rent sliders to find the break-even.
Return metrics for landlords
| Metric | What it measures | Why it matters |
|---|---|---|
| Cap rate | Unleveraged yield | Compare markets apples-to-apples |
| Cash-on-cash | Levered cash return | What your cash actually earns |
| DSCR | Coverage vs debt | Refinance and lender approval |
| GRM | Price ÷ gross rent | Quick screen at scale |
Rental returns calculator
Cap rate, cash-on-cash, DSCR, and GRM from a quick set of inputs.
From assumptions ↓
Default expense, tax & vacancy assumptionsClick to expand — every default is editable and feeds back into the numbers above.ShowHide
Default 6% · at default
% of rent reserved for vacant months. Each +1% reduces NOI by 12 × rent × 0.01.
Default 8% · at default
Standard 8–10%. Self-manage = set to 0 (but value your time).
Default 5% · at default
Reactive repairs. Older homes trend 7–10%.
Default 5% · at default
Long-term replacements. Skip at your peril.
Default $2,800 · at default
Check the county — post-sale reassessment frequently lifts this 10–30%.
Default $1,400 · at default
Landlord/DP-3 policy. Coastal and wildfire markets run multiples of default.
Estimates only. DealForge models every line item — taxes, insurance, vacancy, capex, financing fees — when you run the full analyzer.
Inputs, assumptions & how to read the results
What each field means, the math we apply, and what counts as a healthy number.
What's a healthy cap rate?
Varies wildly by market: 4–5% in primary metros, 6–8% in secondary cities, 8%+ in tertiary or working-class markets.
What's a healthy cash-on-cash?
Most landlords target 8%+ COC on a stabilized rental. Below 5% barely beats a high-yield savings account; below 0% you're feeding the property.
Where does monthly opex come from?
The assumptions panel — vacancy, management, maintenance, and capex as % of rent, plus annual tax and insurance. Every default is industry-standard for a stabilized SFR; override per market.
Why does DSCR matter if I'm paying cash?
Even all-cash buyers should compute DSCR using a hypothetical loan — it tells you whether the property could refinance cleanly later, and whether rent is realistic.
What is GRM and when is it useful?
Gross Rent Multiplier = price ÷ annual gross rent. A fast screen for triaging dozens of listings; lower is better. Use cap rate and COC for the actual decision.
Should I include appreciation?
Not in cap rate or COC — those measure income return only. The full DealForge analyzer projects total return (IRR) with appreciation, paydown, and tax benefits.
Frequently asked questions
What is buy and hold real estate investing?
Acquiring a property to operate as a long-term rental, generating monthly cash flow and capturing long-term appreciation, principal paydown, and tax benefits. Holding periods range from 5 years to indefinitely.
What is a cap rate?
Capitalization Rate = Net Operating Income ÷ Purchase Price. It's the unleveraged annual return a property produces and the standard way to compare income properties across markets.
What is cash-on-cash return?
Annual pre-tax cash flow ÷ total cash invested. Unlike cap rate, COC accounts for leverage and captures what your actual capital is earning.
What is DSCR?
Debt Service Coverage Ratio = NOI ÷ annual debt service. Lenders typically require 1.0–1.25 for DSCR loans; >1.0 means the property pays its own mortgage.
How does DealForge handle Section 8?
The Section 8 calculator pulls HUD Payment Standards by zip and bedroom count, so you can underwrite voucher-friendly rentals at the rent the program will actually pay.
Related features
Invite-only beta
Run every deal through one operating system.
Stop juggling spreadsheets, PDFs, and group chats. Join the waitlist and we'll send your invite in the next wave.