Will this rental cash flow?

Cap rate is net operating income divided by purchase price, ignoring financing. There is no single "good" number, but many buy-and-hold investors look for roughly 5% to 8%. Higher cap rates usually mean more cash flow but often more risk or management. St. Louis is known for relatively affordable prices versus rents, so cap rates here are frequently on the higher end for major metros.

Cash-on-cash return is your annual pre-tax cash flow divided by the actual cash you put in (down payment plus closing and rehab costs). It answers "what return am I getting on the money I invested?" Unlike cap rate, it accounts for your mortgage, so leverage can raise or lower it.

The 1% rule is a quick screen: monthly rent should be at least 1% of the purchase price. A $200,000 property renting for $2,000 a month meets it. It is only a rough filter, not a substitute for a full cash-flow analysis, but it helps you rule properties in or out fast. This calculator shows your rent-to-price ratio so you can check it.

NOI is your effective rental income (gross rent minus vacancy) minus all operating expenses: property taxes, insurance, management, maintenance, and HOA. It deliberately excludes your mortgage, so it measures the property's performance independent of how you finance it. NOI drives the cap rate and is what most investment-property lenders focus on.

DSCR (debt-service coverage ratio) is NOI divided by the annual mortgage payment. A DSCR of 1.0 means the property exactly covers its loan; above 1.0 means it produces surplus income. Many investment-property and DSCR-loan programs want to see about 1.20 to 1.25 or higher. A local broker can tell you which programs fit your numbers.