At Rognas Team Realty & Property Management, we believe that real estate isn’t just about buying and selling properties — it’s about building long-term wealth and making smart, informed decisions. Whether you’re flipping houses, managing rental properties, or purchasing your first investment, knowing a few simple formulas can make all the difference in your returns.

Let’s break them down in plain English.

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1. Net Operating Income (NOI)

Formula: Gross Income – Total Expenses

Your NOI tells you how much money a property makes after covering all operating costs (like property management, maintenance, utilities for common areas, and landscaping). This is the foundation for evaluating an investment property’s profitability.

Example: If your rental property brings in $50,000 a year and costs $15,000 to operate, your NOI is $35,000.

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2. Cap Rate

Formula: (NOI ÷ Market Value) × 100

The Cap Rate shows the annual return you can expect on an investment based on its purchase price. A higher cap rate often means better cash flow, but it can also indicate more risk.

Example: Buy a $400,000 property with $20,000 in NOI and your cap rate is 5%.

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3. Debt Service Coverage Ratio (DSCR)

Formula: NOI ÷ Debt Service

Lenders use this to decide how much they’re willing to loan you. The DSCR measures how easily your property’s income can cover the mortgage. The higher, the better — it signals you can comfortably pay your debt and still have profit left over.

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4. The 70% Rule (For Flippers)

Formula: (After-Repair Value × 70%) – Repair Costs

When flipping homes, you don’t want to overpay. The 70% Rule helps ensure you have enough room to renovate and sell at a profit.

Example: If a home’s ARV is $500,000, you shouldn’t pay more than $350,000 (minus repair costs).

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5. The 1% Rule (For Landlords)

Formula: Monthly Rent ÷ Property Value = 1% or higher

The 1% Rule is a quick way to evaluate rental property potential. If your monthly rent equals at least 1% of the purchase price, you’re starting in a strong position.

Example: A $200,000 property should rent for about $2,000 a month.

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Why This Matters

Whether you’re a first-time investor or expanding your portfolio, these formulas help you:

• Avoid overpaying for a property

• Predict cash flow

• Understand lender requirements

• Set smart rental rates

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How Rognas Team Realty & Property Management Can Help

We manage over 300 properties right here in Edmond and across the OKC Metro — so we know what works in this market. From finding high-performing investment opportunities to managing day-to-day operations, our team helps you maximize your ROI while keeping your experience stress-free.

Call/Text: 405-285-2755

Visit: RognasTeam.com

1015 Waterwood Pkwy, Ste. I-100, Edmond, OK 73034

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Ready to crunch the numbers on your next property? Let’s sit down and run the math together — we’ll make sure your investment works for you before you sign on the dotted line.