How to Run the Numbers on a Clarksville Rental Property (Before You Buy or Hold)

"It's rented, so it's fine" is not a financial analysis. It's a shrug. If you own rental property — or you're thinking about buying one, especially with the steady tenant demand near Fort Campbell — here are the three numbers that separate an actual investment from a house that happens to have a tenant in it.

1. Cap rate: how the property performs on its own

Cap rate = Net Operating Income (NOI) ÷ Purchase Price

NOI is annual rent minus operating expenses — taxes, insurance, maintenance, property management, vacancy reserve — but not the mortgage payment. Cap rate strips out financing so you can compare properties apples-to-apples, regardless of how each one is financed.

There's no universal "good" cap rate — it depends on the market and property type — but tracking it consistently lets you compare a potential purchase against what you already own, and catch properties whose numbers don't hold up next to the asking price.

2. Cash-on-cash return: what your actual money is earning

Cash-on-cash = Annual Cash Flow (after mortgage) ÷ Total Cash Invested (down payment + closing costs + any upfront repairs)

This is the number that matters most if you financed the purchase — it tells you the actual return on the cash you put in, not the total property value. Two properties with identical cap rates can have very different cash-on-cash returns depending on financing terms.

3. The 1% rule — a screen, not a rule

Monthly rent at or above roughly 1% of purchase price is a fast filter: a $250,000 property renting for $2,500/month clears it; the same property renting for $1,800 doesn't. This isn't a final answer — it's a quick way to decide whether a property is worth the deeper cap rate and cash-on-cash analysis, or a pass.

Why this matters more with a strong rental market nearby

Fort Campbell keeps consistent rental demand in and around Clarksville — service members who don't buy immediately, PCS timing that doesn't align with a purchase, and a steady renter pool that many markets don't have. That demand makes rental ownership attractive, but it doesn't override the math. A property with strong "it'll always rent" appeal can still be a weak cash-on-cash performer if the purchase price or financing terms are off.

If you already own rental property

Run these numbers annually, not just at purchase. Insurance premiums, property taxes, and maintenance costs shift every year — a property that cash-flowed well three years ago can quietly erode if nobody's rechecking the math. If it's been a while, it's worth revisiting.

If you're looking to buy

Screen with the 1% rule, then run full cap rate and cash-on-cash analysis on anything that clears it. And ask your agent whether they have access to off-market or pre-MLS inventory — the best investor numbers rarely come from properties everyone else is already bidding on.

Want these numbers run on a specific property — one you own or one you're considering? [Request a free cash flow analysis → 615-772-1709] I also keep a short list of off-market investment opportunities for buyers who move fast — ask to be added.