Back End Ratio

Monthly mortgage plus operating expenses as a percentage of rent.

Example Result

Sample Data

107.41%

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

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Back End Ratio Formula

(Monthly Mortgage + Monthly Operating Expenses) / Monthly Rent x 100

($2,049.13 + $1,012) / $2,850 x 100

107.41%

What This Means

A sample property priced at $385,000 with $2,850/month rent has a back end ratio of 107.41%. If the back end ratio exceeds 100%, the property is cash flow negative. The gap between the back end ratio and 100% is your profit margin. This is a quick way to assess overall deal viability.

Where This Value Comes From

Back End Ratio is not entered directly — it is calculated from Monthly Mortgage Payment, Monthly Rent, and Total Operating Expenses. See the formula breakdown above and the detailed inputs below.

Calculated From

Back End Ratio is calculated using these inputs:

Monthly Mortgage Payment

Monthly principal and interest payment on the mortgage.

$2,049.13

Monthly Rent

The gross monthly rental income collected from tenants.

Found on your lease agreement

$2,850

Total Operating Expenses

Sum of all monthly costs (operating + debt)

$12,146

Platform Distribution

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Why It Matters

If the back end ratio exceeds 100%, the property is cash flow negative. The gap between the back end ratio and 100% is your profit margin. This is a quick way to assess overall deal viability.

Detailed Explanation

The Back End Ratio adds operating expenses to the mortgage and compares the total to monthly rent. This shows the total expense burden relative to income.