Data Glossary

Market Type:

Buy & Hold: A market cycle that occurs when the median monthly mortgage payment (30yr fixed) is less than 75% of median rent.

Buy & Flip: A market cycle that occurs when the median monthly mortgage payment (30yr fixed) is greater than 75% median rent, and, median monthly mortgage payment is less than the median affordable payment (based on median income).

Speculative: A speculative cycle occurs when median mortgage payment (30yr fixed) is greater than the median affordable payment (based on median income). Speculative markets indicate uncharted territory and while sale prices may continue to go up in the short term the market is no longer affordable for the local population and prices are expected to fall.

Investment Definitions:

Cash on Cash Return/Cap Rate: Calculated as annual NRI / median home price. NRI (Net Rental Income) = annual rental income – operating expenses

Note: Assuming the property is purchased with cash, the value of CoC Return is the same as the value of the Cap Rate.

Note: NRI estimated to be 75% of gross rental income, on average.

Cash Flow: Calculated as NRI - median monthly mortgage payment (30yr fixed).