This calculator rolls up multiple properties and computes blended cap rate, cash-on-cash return, and DSCR from portfolio-level totals — aggregate NOI divided by aggregate value — rather than averaging each property's individual ratio. On a two-property illustration below, the blended cap rate comes out to 4.98% against a naive average of 5.08%, and blended cash-on-cash is −0.22% against a naive average of −0.60%. Averaging ratios and aggregating totals are not the same calculation, and they do not give the same answer.
Why a blended ratio is not an average of ratios
For each property, the module computes annual gross rent, NOI after vacancy and operating expenses, annual debt service from a standard amortizing mortgage, and the cash flow, cap rate, cash-on-cash return and DSCR that follow from those. The portfolio rollup then does something specific and, per the module's own comment, deliberate: blended cap rate = total portfolio NOI ÷ total portfolio purchase price, computed on the summed totals — not as the mean of each property's own cap rate. The same logic applies to blended cash-on-cash (total cash flow ÷ total cash invested) and blended DSCR (total NOI ÷ total debt service).
The difference matters because averaging ratios silently reweights the portfolio toward whichever properties are smallest. A $150,000 property with an 8% cap rate and a $1.5 million property with a 4% cap rate do not average to a portfolio performing at 6% — the $1.5 million property carries ten times the dollars, so its 4% dominates the true blended figure far more than a simple average would suggest. Aggregating dollars first and dividing once is the only way to get a number that reflects what the portfolio, as a single financial unit, is actually returning.
Worked example — two properties, blended vs. naive average
Property A: $250,000 purchase, $187,500 loan balance, $1,531 monthly rent (the Census Bureau's Q2 2026 national median asking rent), 7.3% vacancy (the same release's national rental vacancy rate), $3,600/year in operating expenses (illustrative — no verified national figure applies), $62,500 cash invested, financed at Freddie Mac's 6.71% 30-year rate. Property B: $500,000 purchase, $300,000 loan balance, $2,800 monthly rent (illustrative), same 7.3% vacancy and 6.71% rate, $7,200/year operating expenses, $125,000 cash invested.
| Metric | Property A | Property B | Naive average | Blended (portfolio) |
|---|---|---|---|---|
| Cap rate | 5.37% | 4.79% | 5.08% | 4.98% |
| Cash-on-cash | −1.76% | 0.55% | −0.60% | −0.22% |
| DSCR | 0.92 | 1.03 | 0.98 (avg) | 0.99 |
Blended figures are total portfolio NOI, cash flow, and debt service divided once, not an average of the two properties' individual ratios. Property B's larger dollar size pulls every blended figure toward its own performance more than a 50/50 average would.
At the portfolio level: total value $750,000, total debt $487,500, total equity $262,500, a 65% loan-to-value ratio. Total annual rent across both properties is $51,972, total NOI $37,378, total annual debt service $37,788, leaving the portfolio $410 negative for the year — essentially break-even, and a very different statement than either property's cash-on-cash figure taken alone would suggest.
What moves a blended figure the most
Because blended ratios are dollar-weighted, the single input that moves a portfolio's blended cap rate or cash-on-cash the most is not any one property's individual percentage — it is that property's share of total portfolio value or total cash invested. Adding a third, larger property to a two-property portfolio can shift the blended figures substantially even if that property's own metrics are unremarkable, simply because it now represents a larger share of the denominator. This is also why loan-to-value is reported at the portfolio level: a portfolio's 65% blended LTV in the example above says nothing about whether any individual property is over- or under-leveraged relative to the others.
It is worth being honest about scale here too. The 4.98% blended cap rate in the worked example describes two conventionally financed, individually owned properties — not an institutional portfolio. CBRE's US cap rate survey put the national average going-in cap rate for core, Class A multifamily at 4.73%, a figure describing large-scale, professionally managed acquisitions bought with institutional capital and different underwriting than a two-property personal portfolio. It is a useful directional reference — both figures sit in a similar band — but not a like-for-like comparison, and this page does not treat it as one.
What the rollup leaves out
- ·Cross-collateralization and blanket loans. Each property's debt service is computed independently from its own loan balance, rate, and term — the calculator does not model a single loan secured across multiple properties.
- ·Depreciation and portfolio-level tax planning. This is a pre-tax cash and equity rollup. Each property still depreciates on its own schedule under IRS Publication 527; see the rental depreciation calculator for that math property by property.
- ·Sequencing or timing of purchases. The rollup is a snapshot of the properties as entered today — it does not model when each was acquired or how blended metrics evolved as the portfolio was assembled.
Why blended DSCR is the number a lender actually looks at
DSCR — net operating income divided by annual debt service — is the ratio lenders lean on hardest when a borrower holds more than one financed property, because it is a direct measure of whether rental income covers the debt without help from outside income. In the worked example above, Property A alone has a DSCR of 0.92 (its rent does not fully cover its own debt service) while Property B sits at 1.03 (it does, with a thin margin). Averaged naively, that reads as roughly 0.98; the portfolio-level blended DSCR — total NOI of $37,378 over total debt service of $37,788 — comes to 0.99, which happens to land close to the naive average here but, as the cap rate and cash-on-cash figures above show, will not in general. A lender extending a blanket loan across a portfolio, or evaluating a borrower's overall debt-service capacity for a new acquisition, is pricing off the blended figure, not the average of each property's own ratio — a portfolio where a strong property offsets a weak one still shows aggregate coverage even though neither property individually clears a 1.0 threshold plus margin.
This is also why a single underperforming property in a portfolio does not necessarily threaten portfolio-level financing the way it would threaten a standalone loan on that same property — the aggregate NOI from stronger properties in the same portfolio can carry it, up to the point where the blended ratio itself falls below whatever a lender or the borrower's own risk tolerance requires.
Reading a portfolio pitch against this model
When a portfolio is pitched with a single headline cap rate or cash-on-cash figure, the first question worth asking is whether that number is the blended, dollar-weighted figure this calculator produces or a simple average of the individual properties. As the worked example shows, the two can diverge by several tenths of a point even on just two properties — and a promoter has an incentive to lead with whichever number looks better. Ask for the per-property breakdown behind any blended figure, the same way this page shows both.
The risk a portfolio view is meant to expose
The reason to look at properties together rather than one at a time is that individual-property analysis hides correlation. Five rentals that each look sound can share a single point of failure.
Concentration shows up in three ways. Geographic: properties in one metro are exposed to the same employer, the same insurance market and the same local ordinance. Tenant-type: units serving one industry or one institution turn over together. Financing: loans that reprice in the same window put the whole portfolio through a rate change at once.
The practical consequence is that portfolio-level reserves cannot be the sum of per-property reserves. Simultaneous vacancies are the scenario that empties an account calculated on independent averages, and they are exactly the scenario concentration makes likely.
This is also why a portfolio's weakest property deserves more attention than its average return suggests. One badly financed unit can consume the cash flow of several good ones, and the blended figure conceals which is which.
What actually changes as a portfolio grows
Portfolio economics are not simply a multiple of one property's. Two things change as the count rises, and they pull in opposite directions.
Costs per unit tend to fall. Management, maintenance and insurance all become more negotiable with scale, and vacancy averages out across units instead of hitting the whole income at once.
Financing gets harder, though. Lenders apply tighter terms as exposure to one borrower grows, and the number of financed properties is itself a limit in some programmes. The constraint on a growing portfolio is usually credit availability rather than deal availability.
Methodology
The worked example runs this calculator's own per-property and portfolio-rollup formulas on two illustrative properties. Rent ($1,531), vacancy (7.3%), and financing rate (6.71%) draw from the Census Bureau's Q2 2026 Housing Vacancy Survey and the Freddie Mac PMMS for the week ending September 3, 2026; purchase prices, loan balances, cash invested, and operating expenses are illustrative inputs disclosed as such — no verified national figures exist for per-property acquisition costs or expense levels.
Sources
- US Census Bureau — Housing Vacancy Survey, Q2 2026 — accessed 2026-09-07
- Freddie Mac — Primary Mortgage Market Survey — accessed 2026-09-07
- IRS — Publication 527, Residential Rental Property — accessed 2026-09-07
- CBRE — US Cap Rate Survey, H2 2025 — accessed 2026-09-07