Cap Rate, Cash-on-Cash, Yield, and GRM: the glossary Imnoba uses (and why)

This is the ANNUAL net operating income (rent minus operating expenses: tax, HOA, insurance, maintenance, vacancy, management) divided by the property's price. It does NOT include mortgage payments — it measures the property's own performance, as if you'd bought it in cash.

It's useful for COMPARING properties evenly, regardless of how each buyer decides to finance them.

This is the annual cash flow (after paying the mortgage) divided by the cash you actually put in out of pocket (down payment + closing costs). Unlike cap rate, it DOES account for financing — which is why two people buying the SAME property with a different down payment or interest rate get a different cash-on-cash return.

It's the most relevant metric if your question is 'how much is the money I actually put in earning?', rather than 'how does the property itself perform?'.

This is simply the GROSS annual rent (before any expenses) divided by the price. It's the simplest and quickest metric, but also the least precise — it doesn't reflect the hidden costs (tax, insurance, HOA) that can be significant in Florida.

This is conceptually the inverse of yield: price divided by gross annual rent. A lower GRM generally indicates the property 'pays for itself' faster in terms of gross rent — useful as a quick comparison between similar properties in the same area.