Clarity
What Does the Score Mean
Caution
Neutral
Decent
Metric Score:
Metric Score:
Net Operating Income
Metric Score:
Internal Rate of Return
Metric Score:
Cash on Cash Return
Metric Score:
Cap Rate
Metric Score:
Gross Operating Income
Metric Score:
Gross Rental Yield
Metric Score:
Net Rental Yield
Metric Score:
Operating Expense Ratio
Loan to Value Ratio
Metric Score:
Caution
Metric Score:
Income can’t cover debt, possibly untenable
Caution
Deeply negative. Bleeding cash
Caution
Very low or negative. Expenses dominate. Be careful.
Caution
Weak return, unattractive unless risk is minimal.
Caution
Minimal or no return, risky.
Caution
Far below market, potential overpriced risk.
Caution
Very low collections, poor income stability.
Caution
Very weak yield, somewhat unattractive.
Caution
Expenses erode almost all rent.
Caution
Extremely high, potentially untenable.
Caution
Extremely leveraged, high risk.
Risk vs. reward balance:
Offsetting strengths:
Floor effect (never 0%):
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Neutral
Higher risk, thin cushion
Neutral
Negative or break even unless offset by Growth strategy
Neutral
Low surplus. Thin margin, a little risky.
Neutral
Marginal return, acceptable only with strong stability.
Neutral
Low return, acceptable in early or strong markets.
Neutral
Below average, slim returns.
Neutral
Low potential, risk of underperformance.
Neutral
Low yield, tolerable in prime areas.
Neutral
Very weak, fragile
Neutral
Cost-heavy, thin margins.
Neutral
Meaning:
Negative
Investor Takeaway:
Treat this as a red flag. It doesn’t always kill the deal, but you need a very strong offset elsewhere (or a clear strategy to fix the weakness).
Example:
1. Cash flow is negative now, but maybe you’re planning renovations that will flip it positive. 2. Not necessarily negative if you've inherited the property.
Aggressive leverage, lenders cautious.
Meaning:
The property is average or marginal
Investor Takeaway:
Acceptable but not strong. Neutral doesn’t mean 'failure' — many successful investments carry Neutral scores in certain areas.
Example:
Cap Rate slightly below average, but NOI margins are strong enough to compensate?
Meaning:
This is a stable, fair property which performs reasonably well but isn’t outstanding.
Investor Takeaway:
Decent metrics form the backbone of many good investments. Solid, but verify other areas before committing.
Example:
Cash-on-Cash return of 5% — modest but reliable.
Decent
Thin but workable cushion
Decent
Positive, but barely. Fragile, little margin.
Decent
Modest surplus. Sustainable but not strong.
Decent
Reasonable, solid but not overly exciting.
Decent
Modest but workable.
Decent
Slightly below avg, marginal value.
Decent
Slightly below avg, limited upside.
Decent
Moderate yield, acceptable in balanced markets.
Decent
Fair but may be risky.
Decent
Elevated, but acceptable
Decent
Still risky, common in aggressive deals.
Good
Healthy cushion, lenders comfort level good
Good
Slightly positive. Stable albeit modest.
Good
Adequate surplus. Healthy, workable.
Good
Healthy, comfortably above average benchmark.
Good
Healthy and reliable, benchmark return.
Good
Meets average, acceptable.
Good
Average, workable.
Good
Solid yield, reliable
Good
Stable, minimum acceptable.
Good
Reasonable, efficient.
Good
Excellent
Balanced leverage, acceptable.
Excellent safety, low risk
Excellent
Positive and stable. Strong contributor to returns.
Excellent
Strong surplus. Solid contributor to returns.
Excellent
Strong return, attractive to investors.
Excellent
Strong, efficient use of capital.
Excellent
Above avgerage, strong value.
Excellent
Good rent and collections, stable.
Excellent
Stronger than average, very appealing.
Excellent
Strong, resilient to expenses.
Excellent
Excellent safety, low risk
Excellent
Good
Lower leverage, safer profile.
Excellent
Exceptional
Exceptional
Exceptional safety, lenders highly favorable
Exceptional
Strong & positive Outstandingcash flow .
Exceptional
Very strong! Exceptional. Robust and resilient profitability.
Exceptional
Exceptional, highly attractive.
Exceptional
Top-tier return, very attractive.
Exceptional
Top-tier, high yield with acceptable risk.
Exceptional
Strong income potential, excellent stability.
Exceptional
Exceptional, rare and highly desirable.
Exceptional
Exceptional safety, lenders highly favorable.
Exceptional
Top-tier efficiency, tightly controlled.
Exceptional
Cautious lender preferred, resilient.
Meaning
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Shows actual cash left after expenses and financing. Negative = bleeding, break-even = survival, positive = strength.
Meaning
NOI as a % of gross income. Captures operating efficiency. Low margins = weak profitability, high margins = stability.
Reflects time-adjusted return. Low IRR = underperforming, high IRR = strong compounding potential.
Meaning
Meaning
Measures cash yield relative to invested equity. Shows how quickly cash is working.
Meaning
Ratio of NOI to property value. Shows income yield relative to price.
Meaning
Captures potential rent actually collected. Low GOI = vacancy or poor collections, high GOI = stability.
Meaning
Rent relative to property value, before expenses. Snapshot of raw earning power.
Meaning
Rental return after expenses. The "true" yield on property.
Meaning
Share of income consumed by expenses. High ratios erode returns.
Meaning
Measures leverage relative to property value. High LTV = riskier debt profile.
Meaning:
Strong performance in metrics. Reliable, above average.
Investor Takeaway:
A 'Good' rating means the metrics are contributing positively to the investment’s strength. Combine a few of these and the deal is likely attractive.
Example:
IRR of 12% — comfortably above conservative targets.
Meaning:
High performance, showing strong fundamentals and stability. Investors should feel confident
Investor Takeaway:
Metrics here are highly favorable, lowering risk and boosting attractiveness. These are the sweet spots investors want to see.
Example:
Operating Expense Ratio at 35% — very efficient.
Meaning:
Top-tier, market-leading performance. Exceptional strength in metrics. Rarely achieved but highly desirable.
Investor Takeaway:
These are rare and valuable. An Excellent score adds major weight to the overall blended result and often tips a property into 'must-buy' territory.
Example:
Debt Coverage Ratio ≥ 1.40 — lenders love this level of safety.
Meaning
Measures how easily income covers debt obligations. Below 1.0 = dangerous, above 1.40 = lenders love it
Investor Takeaway
The single most important risk measure for financing. Strong DCR means better financing terms and less stress during downturns.
Investor Takeaway
Critical for holding power. Even modest positive cash flow can sustain a deal long-term.
Investor Takeaway
Key for long-term property health. High NOI margins reduce risk of shocks.
Investor Takeaway
The ultimate "total return" lens. Even 6–8% IRR may be fine in safe markets, but 12–16%+ is attractive for growth investors.
Investor Takeaway
Early years may see low CoC, but stabilized properties should aim for mid-to-high single digits.
Investor Takeaway
Market-driven. Low cap = high prices, high cap = better income but maybe weaker location. Balance risk and reward.
Investor Takeaway
Reflects management quality and tenant demand. Strong GOI underpins all other metrics.
Investor Takeaway
Useful for comparisons, but doesn’t account for costs. Best paired with net yield.
Investor Takeaway
Stronger indicator than gross yield — shows what actually hits the bank account.
Investor Takeaway
Lean operations (<35–40%) drive profitability. Anything >50% is a red flag.
Investor Takeaway
Conservative leverage (≤65%) is highly attractive. Aggressive leverage (>80%) is risky but can amplify returns if things go right.
📊 It's important to understand that a 50% score is not a “Fail” in PropVest IQ
Relative, not absolute:
In a classroom, a 50% grade means the student got half the questions wrong. In PropVest, a 50% score doesn’t mean “half bad”; it means the property is performing moderately well on that metric.
Many successful investments live in the Decent or Good range (40–65%). For example, a property with average Cap Rate but strong cash flow is still very investable.
A property can be average on one metric (say, NOI margin at 45%) but excellent on another (say, IRR at 16%). Together, the blended score gives a truer picture.
Even a “Caution” tier still contributes some value. The property isn’t necessarily a failure; it’s just higher risk or in need of improvement. This avoids punishing it like a school “F”.
Think of 50% not as “barely passing” but as neutral or investable with caution. Real estate is rarely perfect across all metrics, so many good deals naturally cluster in the 50–70% blended score range.
👉 The real power comes from the composite score across all 11 financial metrics + location weighting — not from any single percentage.