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Select the best investment opportunity

Here is a table of investment vacation rentals. Focus first on having an OER that is less than than 1, which means overall the property expenses are less than the rental income. This is a summary statistic for your risk.

After eliminating properties with high OER, review the capitalization rate. Remember the cap rate summarizes the reward as a measure of the total purchase cost. The cap rate compares income to purchase price, excluding financing costs. This let's you see what you could expect in income versus your total purchase outlay.

Which property has attractive OER and cap rate?

This exercise is part of the course

Data-Driven Decision Making for Business

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