Question 1

What is a good cash-on-cash return on a Fort Worth rental?

Accepted Answer

Seasoned single-family buyers commonly look for 8% or better cash-on-cash after realistic reserves for vacancy, maintenance, capital items, and management. Deals at asking price often pencil well below that, which is why the number is worth computing before the offer, not after. These are rules of thumb, not financial advice.

Question 2

What DSCR do lenders want on an investment property?

Accepted Answer

Most DSCR lenders underwrite to a debt-service coverage ratio of about 1.2 or higher, meaning net operating income covers the loan payment with 20% headroom. Below 1.0 the property does not cover its own debt. Computing DSCR up front tells you whether a refinance or DSCR loan is realistic before you commit.

Question 3

Does the 1% rule still work in Tarrant County?

Accepted Answer

Almost nothing bought at retail price hits a full 1% of purchase price in monthly rent in this market; well-bought single-family deals commonly land around 0.7% to 0.8%. Treat the 1% figure as a screening gauge rather than a pass-fail test, and let cash flow after real reserves make the actual decision.

Question 4

What reserves should I budget when analyzing a rental property?

Accepted Answer

A realistic single-family underwrite around Fort Worth budgets roughly 8% of rent for vacancy, 8% for maintenance, 5% for capital reserves like roofs and HVAC, and about 10% of collected rent for professional management. Sellers and listing pro formas routinely omit most of these, which is the main reason marginal deals look good on paper.

Underwrite it like a lender would.