How Prudentia builds a rental-property screen
Prudentia keeps four layers distinct: your inputs, provider-supplied rental evidence, deterministic financial calculations, and AI-assisted interpretation. Here is what each layer can and cannot tell you.
Your inputs and assumptions
The screen begins with a property address and an optional purchase price. If you leave the price blank, an available value estimate is clearly labeled as the price used for the scenario. If no usable estimate is available, enter the purchase price you are considering to continue. You can adjust the assumptions used in the financial model, and the signed-in analysis shows the exact values applied to that result.
The price used in the calculations. It is your purchase-price assumption or a separately labeled estimated value. An estimated value is not an asking price or agreed purchase price. Confirm the price and its source when reviewing a saved report.
Choose a percentage for a quick expense estimate, or enter monthly amounts for taxes, insurance, maintenance and repairs, management, owner-paid utilities, HOA fees, future replacements and other costs. Divide an annual bill by 12 to enter its monthly amount. Enter zero for a category that does not apply.
Prudentia's starting values are editable inputs, not local market facts, financing quotes, or recommendations. That is why this public page explains the categories without publishing a supposedly universal set of defaults.
Provider-supplied rental evidence
Prudentia receives the subject property's estimated long-term rent, estimate range, available property attributes, and comparable rental listings from a specialized property-data provider.
A result can show up to five comps and available context such as listing status, distance, age, and similarity. Coverage and fields vary by property. Treat the estimate and comps as evidence to investigate, not as a guarantee of achievable rent.
Listing rents are advertised asking prices. Signed leases and rent collected are unverified. The provider supplies its estimate and range separately; achievable rent needs local confirmation. Status reflects when the data was collected. An inactive listing may have been removed for several reasons; whether it leased is unknown. Days since the listing was last seen active, measured when the data was collected. Total time on the market is unknown.
The automated screen currently supports one dwelling with a recognized property type. RentCast estimates one unit for multi-family and apartment properties, so we stop whole-building and uncertain-scope analyses rather than treating that estimate as total rent. For a 2–4 unit property, confirm the unit count and obtain a rent roll showing monthly rent for every unit; the current screen cannot yet use that rent roll to analyze the building. Older unsupported reports remain readable and exportable as clearly warned historical snapshots.
Financial calculations
These metrics are calculated from the displayed price, rent, and assumptions by versioned application code. They are not generated or altered by AI.
The cash-flow headline uses the displayed monthly rent: an investor assumption when one is set, otherwise the provider estimate. Rent sensitivity separately holds other assumptions constant and uses the saved provider low, estimate, and high rents exactly. Those scenarios may differ from an investor's rent assumption. Range endpoints and breakeven rent are scenarios, not forecasts, probabilities, or valuations. Saved base calculations remain unchanged; supported older reports label supplemental calculations separately. Unknown legacy models retain their saved cash flow without new scenarios.
| Metric | Definition |
|---|---|
| Annual scheduled rent | Monthly rent used × 12 (investor assumption when set; otherwise provider estimate) |
| Effective gross income | Annual scheduled rent × (1 − vacancy rate) |
| Operating expenses | Percentage: effective gross income × expense ratio. Itemized: total monthly property expenses × 12. |
| Net operating income (NOI) | Effective gross income − operating expenses |
| Cap rate | NOI ÷ purchase price |
| Debt service | Monthly principal-and-interest payment × 12; payment uses price, down payment, interest rate, and term |
| Annual cash flow | NOI − annual debt service |
| Monthly cash flow | Annual modeled cash flow ÷ 12 |
| Monthly breakeven rent | Percentage below 100%: annual debt service ÷ [12 × (1 − vacancy rate) × (1 − expense ratio)]. At 100% or more, break-even is not achievable with these assumptions. Itemized: (annual property expenses + annual debt service) ÷ [12 × (1 − vacancy rate)]. |
| Rent sensitivity | Provider low / estimate / high monthly rents with the same vacancy, expense and financing assumptions; endpoint NOI minus saved debt service |
| Simplified cash-on-cash return | Annual cash flow ÷ down payment (closing costs, initial rehab, and reserves excluded) |
| Total cash invested | Down payment + closing costs − closing cost credits + initial repairs + starting cash reserve |
| Cash-on-cash with upfront costs | Annual cash flow ÷ total cash invested, when a complete upfront budget is entered |
| Gross rent multiplier (GRM) | Purchase price ÷ annual scheduled rent |
| Debt-service coverage ratio (DSCR) | NOI ÷ annual debt service |
| Breakeven vacancy | Percentage below 100%: 1 − annual debt service ÷ [annual scheduled rent × (1 − expense ratio)]. At 100% or more, break-even is not achievable with these assumptions. Itemized: 1 − (annual property expenses + annual debt service) ÷ annual scheduled rent. Expressed as a percentage. |
In itemized mode, each monthly dollar budget stays fixed when testing rent or vacancy. The report adds the entries and shows their share of rent after vacancy. Future replacement budgets are included in property expenses and reduce NOI, cap rate, loan coverage and cash flow. Lenders may use a different definition. Entered amounts carry no recorded verification against bills or quotes.
When rent after vacancy does not cover property expenses, the price comparison shows the break-even purchase price as unavailable. A lower price alone cannot make that budget break even.
AI-assisted interpretation
AI helps summarize the supplied property data, calculated metrics, and assumptions. It does not assign the displayed financial metrics or a decision-grade investment score. In the deal-list workflow, it also helps extract structured property details for you to review before analysis.
The application validates the shape of a new AI response and pins numeric rent to the provider-supplied input. An AI summary can still be wrong or overstate what the evidence supports, so check it against the underlying figures and evidence before acting.
Follow one set of assumptions through the model
This is a teaching example generated with the same calculation code used by Prudentia. It is not a property, customer result, market forecast, or financing offer.
$30,000 × (1 − 7%)
$27,900 − $10,602
$1,216 monthly payment × 12
NOI − annual debt service
Two simple stress cases
| Case | Annual cash flow | CoC return | DSCR |
|---|---|---|---|
| Base assumptions | $2,705 | 4.33% | 1.19 |
| Rent falls to $2,250/month | $975 | 1.56% | 1.07 |
| Expense ratio rises to 45% | $752 | 1.20% | 1.05 |
Neither stress case adds separately verified taxes, insurance, repairs, capital work, closing costs, initial rehab, or reserves. Those costs still need quotes, records, inspections, and deal-specific review.
Built to be inspectable, not treated as a black box
Prudentia's separation of property operations, NOI, financing, debt service, cap rate, and DSCR follows established underwriting definitions. For orientation, see the OCC Commercial Real Estate Lending handbook. Rental evidence should be checked against leases and comparable-rent support; see Fannie Mae's rental-income guidance. Expense categories vary by deal; IRS Publication 527 is one useful inventory, not a substitute for tax advice.
Those sources inform terminology and diligence discipline; they do not certify this model, set universal investor thresholds, or make a residential first-pass screen equivalent to a lender appraisal or full underwriting.
Use the screen to decide what to investigate next.
A promising first pass is a reason to continue diligence. It is not proof that a property will perform.