Investment Property Analysis

"Is this a good deal?" is the question every prospective buyer asks, and it's almost always the wrong first question. A property can be a good deal for one investor's goals and financing and a poor one for another's. Before we talk price, we talk about what the numbers actually need to show.

The core metrics, defined

Three numbers do most of the work in a first-pass analysis. Cap rate (net operating income divided by purchase price) measures a property's return independent of financing — useful for comparing deals apples-to-apples. Cash-on-cash return (annual pre-tax cash flow divided by actual cash invested) reflects your specific financing and is usually the number that matters most to an individual buyer. Gross rent multiplier (price divided by annual gross rent) is a rougher, faster screening tool — useful for ruling properties out, not for making a final decision.

What "good" looks like right now

Cap rates compress in strong markets, and Greater Boston is a good example: stabilized multifamily properties in the urban core (Boston, Brookline, Cambridge, Somerville) are trading in roughly the 3.5–5.5% cap rate range as of 2026, with well-located, updated Class A properties often at the tighter end of that band. Investors looking for a 6–8% cap rate typically need to look toward the outer suburbs or take on a genuine value-add project rather than buying stabilized. That's not necessarily a problem — a well-bought 5% cap rate property in an appreciating submarket has historically outperformed a 7% cap rate property in a declining one over a seven-to-ten-year hold. The point of the analysis is figuring out which situation you're actually in, not chasing the highest number on a spreadsheet.

Start with cash flow, not appreciation

It's easy to get pulled into a story about future appreciation, especially in markets that have performed well historically. We start every analysis with cash flow instead: rent, minus vacancy allowance, minus operating expenses, minus debt service. If a property doesn't work on a cash flow basis under reasonably conservative assumptions, it needs a very clear appreciation or value-add thesis to make sense — and that thesis needs to be stress-tested, not assumed.

The core inputs

• Comparable rents, not listed rents. What similar units are actually renting for, not what a landlord is asking.
• A realistic vacancy and turnover allowance, even in strong rental markets.
• Operating expenses including taxes, insurance, maintenance reserves, and management (even if the owner plans to self-manage — time has a cost).
• Capital expenditure reserves for the roof, systems, and major components based on their age and condition, not just their current functionality.
• Financing terms specific to the buyer's actual rate, term, and down payment — generic assumptions can flatter or unfairly punish a deal.

The spreadsheet doesn't make the decision. It just makes sure the decision is being made with real numbers instead of a feeling.

Renovation budgets deserve their own scrutiny

Value-add deals live or die on the renovation budget, and renovation budgets are where optimism creeps in fastest. We build these out scope by scope with contractor input where possible, and we assume a contingency on top — not because every project runs over, but because enough of them do that ignoring it skews the analysis.

Hold vs. sell is an ongoing question

For owners who already hold investment property, the same framework applies in reverse: given current rents, current expenses, current equity, and current alternatives, does holding still make sense, or would selling and redeploying capital serve the same goals better? This isn't a question with a permanent answer — it's worth revisiting periodically, particularly after a rate environment shifts or a property's condition changes materially.

What a written analysis looks like

Our investment analysis engagements produce a written report covering cap rate and cash-on-cash projections, comparable sales and rents, a renovation budget where relevant, and a hold-vs-sell or buy-vs-pass recommendation — walked through together, not just emailed over. The goal isn't to hand over a spreadsheet; it's to leave you able to explain the decision to yourself, and defend it, months later.