Levered Yield Calculator

Leverage amplifies yield — good and bad. This calculator computes levered yield so you can compare against unlevered to size leverage risk.

NOI (annual)

Annual debt service

Equity invested

Levered yield (cash-on-cash)

6.80%

Net cash flow

$170,000

DSCR

1.35

How the math works

Levered yield = (NOI − debt service) ÷ equity. DSCR = NOI ÷ debt service.

Accretive leverage lifts cash-on-cash when asset yield > loan cost. At max leverage, returns look great but risk concentrates. Target 1.25-1.35x DSCR and stress-test every year.

How to Use

Enter NOI.
Enter annual debt service.
Enter equity invested.
Read levered yield and leverage lift.

Frequently Asked Questions

Healthy levered yield?

8-12% core; 12-18% value-add; 18-25% opportunistic. Above 25% = likely over-levered or over-projected; verify assumptions.

Leverage lift?

Levered − unlevered yield. Positive = accretive leverage. Negative = debt costs more than asset yields (avoid).

Risk?

Levered returns fall faster than unlevered in a downturn. 10% unlevered drop on 75% LTV = 40% equity drop. Always stress-test levered returns against NOI hits.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.