Rental Investment AnalyzerAnalyze a Rental Property Before You Offer
We'll be straight with you, because guessing wrong here is expensive: at today's interest rates, most Austin-area rentals simply don't pencil as a pure investment. We run the numbers on property after property in and around Austin, and on the majority of them the returns don't clear a bar that justifies the risk and the work. That's not pessimism — it's what the math says while borrowing costs sit where they are. For a lot of buyers, the honest answer right now is wait, or only buy if the specific deal truly works.
But there's a real strategy hiding in that difficulty. High rates are exactly why prices soften and sellers offer concessions — buyers are scarce, so the ones who show up have leverage. History suggests that when rates eventually fall below roughly 5%, cheaper borrowing pulls buyers back in and pushes prices up. So there's a case for taking on more risk now: buy at today's better prices and concessions, then refinance into the lower rate when it arrives — improving your cash flow and riding the appreciation that the rate cut itself helps create. That's a genuine play, but it's a bet on timing and your ability to carry the property until rates move. It's not for everyone, and it's exactly the kind of thing worth talking through with us before you commit.
On that appreciation point: research does find that lower mortgage rates tend to lift home prices, though estimates vary widely by market — from a few percent to as much as ~10% per one-point drop — and supply-constrained metros feel it more than places that can build. See the FHFA working paper on mortgage rates and house-price appreciation.
Buy It as a Rental Now
You're purchasing this as an investment from day one and renting it out. The numbers have to work as a pure investment immediately — cash flow, cash-on-cash return, and long-term growth all carry the decision, because you won't be living here to justify anything the math doesn't.
Live In It Now, Rent It Later
You're buying a home to live in, in a city you want to commit to — but you know a job or life change could move you. So it also has to hold up as a rental if that day comes. You weigh two things at once: what it's worth to you as a home now, and whether it stands on its own as an investment later.
The Two Numbers That Decide
These benchmarks follow the conservative underwriting framework popularized on BiggerPockets — the discipline of buying for returns you can count on today, not appreciation you hope shows up later. Even seasoned investors set their bar differently, so the targets below are yours to change; the verdict recalculates against whatever you enter.
Cash-on-Cash Return
Your first-year pre-tax cash flow as a percent of the cash you put in. The floor sits low on purpose: even 4% roughly matches a bond, but here you also get loan paydown, tax treatment, and upside a bond never offers. A higher bar means you lean less on those extras.
CAGR
Your compound annual growth rate as a rental — the total annualized return combining appreciation, loan paydown, and cash flow over however long you hold. Year one is the first year you rent it out, so if you'll live in it first, the clock starts the day it becomes a rental, not the day you buy. CAGR usually climbs the longer you hold, since paydown and cash flow compound while one-time selling costs spread across more years. The logic behind the bar: the S&P 500 returns roughly 8–10% passively, so a rental — which takes real work — should beat it by two to four points, or you've effectively bought yourself a job.
Not sure where to set the bar for your goals? Set your targets with the Adam Timothy Group.
How to Use This Tool
Enter the purchase, financing, income, and expenses below. The tool applies a conservative, real-time model — no wishful thinking baked in — and surfaces the two metrics that separate a real deal from a bet on appreciation: cash-on-cash return and compound annual growth rate. It's pre-loaded with a real example, so change any field to run your own numbers. We'd rather show you an honest "no" than help you talk yourself into a bad deal.
Which describes you?
Not sure where your numbers should land? Run them with the Adam Timothy Group — we do this every week.
Purchase
Pre-loaded with a real, active example so you can see the tool in action — modeled on 124 Edward R Gaytan St, San Marcos, a 2023-built 3/2 at $329k, assumed rentable near $3,200/mo. It shows how disciplined underwriting reads a solid, cash-flow-positive home: the numbers can look fine and still sit under a strong return target once you refuse to bet on appreciation. That gap is exactly the conversation worth having with us. Browse similar homes in 78666, or change any field to run your own deal.
Don't buy paying for appreciation that may never arrive. Check history for your ZIP, then enter the conservative end — we default to 2%, below the long-term average. Keep an eye on the rate, too: lower financing costs pull more buyers into the market and tend to push prices up, so a drop from, say, 6.7% to 5.7% can lift appreciation and cash flow at once — a double boost to CAGR. The tool won't link them for you, so if you change the rate, revisit this number as well. Zillow home values · FHFA House Price Index
Financing
Rental Income
Getting rent right is where deals are won or lost, so the Adam Timothy Group triangulates it from several directions rather than trusting one number: recent lease comps, online estimators, and the property-management companies who actually have to fill the unit. We weigh the PM's figure most heavily — and if you'd rather not guess, we're happy to pull this number with you.
Operating Expenses
Taxes and insurance are knowable — no excuse for missing them. Repairs, CapEx, Vacancy, and Management are reserves entered as a percent of gross annual rent (not purchase price).
—
Enter your numbers to see the analysis.
Cash-on-Cash
—
Floor: 4%
CAGR · 5 yr
—
Floor 10% · Target 12%
Want a Second Set of Eyes on the Numbers?
This tool gets you to a first read. Before you write an offer, the Adam Timothy Group can pressure-test your assumptions against real Austin comps, local tax and insurance realities, and property-manager rent estimates — then help you structure an offer that actually works. There's almost always a version worth buying; the question is at what price and on what terms.
This analyzer is an educational estimate, not financial, tax, or investment advice. Default assumptions are intentionally conservative and may not reflect your specific market, financing, or property. Verify all figures — including taxes, insurance, and achievable rent — with qualified professionals before making any investment decision.
