1. Start with rent you can defend
Use an existing lease, recent comparable rentals, current competing rentals, property-management input, condition, bedroom and bathroom count, location, and lease terms. Do not use one DFW-wide number for a specific house.
HUD Fair Market Rents are primarily housing-program benchmarks and gross-rent estimates that include shelter rent plus most tenant-paid utilities. They are not a property-specific market-rent comp.
Source: HUD USER Fair Market Rents
2. Include vacancy even when occupied
An occupied property can still face turnover, nonpayment, make-ready time, or leasing downtime. Use a vacancy or credit-loss assumption you can explain. Do not hard-code a “Dallas standard.” Compare a base case with a higher-vacancy case to see how fragile the result is.
Browser-only educational tool
DFW Rental Deal Analyzer
Enter your own assumptions. Inputs stay in your browser and are not submitted to Amoni.
Avoid double counting: enter principal + interest only. Taxes and insurance have separate fields; do not enter full PITI.
Results
Annual scheduled rent
$0
monthly rent × 12
Vacancy / credit loss
$0
annual scheduled rent × vacancy %
Effective gross income
$0
scheduled rent + other income − vacancy
Recurring operating expenses
$0
taxes + insurance + annual HOA + management + maintenance + utilities + other opex
NOI
$0
effective gross income − recurring operating expenses
Cap rate
Add inputs
NOI ÷ purchase price
Annual debt service
$0
monthly principal + interest × 12
Pre-tax cash flow after reserve
$0
NOI − debt service − CapEx reserve
Cash-on-cash return
Add inputs
pre-tax cash flow after reserve ÷ total cash invested
This model displays CapEx reserve below NOI. Debt service, income taxes and depreciation are outside NOI.
3. Use the actual property-tax situation
Texas has no state property tax. Local taxing units set property-tax rates, so a generic Dallas percentage is a poor underwriting shortcut.
- Confirm the county.
- Identify the appraisal district and account.
- Review the subject property's current appraisal and tax information.
- Identify taxing units and current rates.
- Choose the assumption for your model.
Sources: Texas Comptroller and, for Dallas County property, Dallas Central Appraisal District. Not every DFW property is in DCAD.
4. Separate property operations from financing
Recurring operating expenses may include property taxes, insurance, HOA, management, routine maintenance, owner-paid utilities, and other recurring property expenses. Debt service stays separate.
IRS Publication 527 lists common rental-property expense categories. Use it as an expense checklist, not as the definition of NOI.
Source: IRS Publication 527
5. Do not double-count escrowed taxes and insurance
CFPB explains that a mortgage payment can include principal, interest, taxes, and insurance—PITI—and taxes and insurance may be escrowed. In this calculator, enter principal and interest as debt service, with taxes and insurance separately. Do not enter full PITI and subtract taxes and insurance again.
Source: CFPB PITI guidance
6. What NOI tells you
NOI shows property income after recurring operating expenses and before financing in this educational model. Two investors can buy the same property with different down payments, rates, and loan terms. Property NOI can be the same while cash flow and cash-on-cash returns differ.
7. What cap rate does—and does not—tell you
Cap rate = NOI ÷ purchase price. It can help compare operations with acquisition price before financing. It does not tell you loan cost, cash invested, appreciation, rent growth, tax consequences, neighborhood performance, physical condition, or whether the investment fits you. There is no universal pass/fail threshold.
8. Cash-on-cash return brings financing into the picture
Cash-on-cash return = annual pre-tax cash flow after the selected reserve ÷ total cash invested. Define cash invested consistently across deals, including relevant down payment, buyer-paid closing costs, upfront work, initial reserves, and other acquisition cash.
9. Keep a CapEx reserve visible
Major replacements do not happen evenly every month. This model shows the selected CapEx reserve separately below NOI so you can see property operations and the added cash-flow cushion. That is an educational presentation choice, not the only accounting convention.
10. Stress-test the deal
| Stress test | What it shows |
|---|---|
| Lower rent | Dependence on the rent assumption |
| Higher vacancy | Exposure to turnover or downtime |
| Higher taxes or insurance | Sensitivity to fixed operating expenses |
| More maintenance | Whether an ordinary bad repair year erases cash flow |
| More cash invested | Effect on cash-on-cash return |
| Higher debt service | Financing sensitivity |
11. Keep market context separate from property math
A Dallas sales-market trend cannot tell you the subject property's rent, vacancy, cap rate, repair cost, or future return. Do not treat past sales-market performance as a rental-return forecast.
12. Review the property, not only the spreadsheet
Due diligence may include inspection, title, survey, repair estimates, insurance quote, property-tax verification, zoning or permitted use, financing review, and lease or tenant review when occupied. For compliance planning, see the Dallas rental-registration acquisition guide.
A simple rental-underwriting process
- Verify expected rent.
- Document vacancy.
- Enter property-specific recurring expenses.
- Calculate NOI.
- Add financing separately.
- Add a visible CapEx reserve.
- Enter acquisition cash consistently.
- Calculate cap rate, cash flow and cash-on-cash.
- Stress-test important assumptions.
- Complete physical, title, legal, insurance and financing due diligence.
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Run your own numbers and complete independent due diligence before entering a transaction.
FAQs
What is cap rate?
Annual NOI divided by purchase price in this calculator; it compares operations with acquisition price before financing.
What is cash-on-cash return?
Annual pre-tax cash flow after the selected reserve divided by total cash invested.
Should I use a standard Dallas property-tax percentage?
No. Verify the subject property's appraisal and tax records and taxing units.
Is HUD Fair Market Rent the market rent for my property?
No. It is primarily a housing-program benchmark and gross-rent estimate.
Is CapEx inside NOI?
Models differ. This calculator keeps the selected reserve below NOI and above final pre-tax cash flow.
What is a good cap rate in Dallas?
There is no universal number. This tool calculates your inputs; it does not rate the deal.