Methodology
How every number here is calculated
You are going to make decisions with these figures, so you should be able to check them. Every formula the platform uses is below, along with the conventions behind it — including the ones where a defensible choice changes the answer.
What counts, before any math runs
Two filters apply to nearly every figure, and they matter more than the formulas do — a metric is only as honest as the rows feeding it.
Actuals only. Anything dated in the future is excluded, as are scheduled-but-unconfirmed rent and rent flagged late. A placeholder for rent you expect is not income until it arrives, so it never inflates a month that has not happened.
Transfers are excluded from everything. Moving your own money between accounts is not income or expense, and counting it would double-count real activity.
Personal properties are excluded from portfolio figures entirely. Overhead entities count in exactly one place — either the portfolio roll-up or a separate overhead line, never both.
Portfolio metrics2
Net Operating Income (NOI)
NOI = Total income − Total operating expenses
Capital expenditure and debt service are deliberately EXCLUDED — that is the standard real-estate convention, and it is why NOI can look healthy on a property whose mortgage still makes it cash-flow negative. Those are reported separately rather than folded in.
Cap Rate
Cap Rate = Annualized NOI ÷ Total estimated value3 × 100
Unleveraged on purpose: the mortgage is not in the numerator. Two investors with identical properties and different loans get the same cap rate, which is what makes it comparable across deals.
Operating Expense Ratio (OER)
OER = Operating expenses ÷ Income × 100
Uses the same expense set as NOI, so the two always agree. A property new to the portfolio is treated as stabilizing rather than penalized for make-ready spend.
Debt Service Coverage Ratio (DSCR)
DSCR = NOI ÷ Annual debt service
Annual debt service is principal + interest, taken from the amortization schedule or the live servicer balance — not estimated.
Cash-on-Cash Return (CoC)
CoC = (NOI − Annual debt service) ÷ Net cash invested × 100
Net cash invested is derived from the acquisition record — down payment plus closing costs — not from a ledger transaction. A down payment is an equity event, not an expense; booking it as one would show a large fake loss in the year of purchase.
Equity
Equity = Estimated value3 − Mortgage balance
The mortgage balance is either computed from the amortization schedule or read live from a connected servicer, per property — you choose which, and the choice is visible.
Short-term rental metrics2
Average Daily Rate (ADR)
ADR = Gross booking revenue ÷ Booked nights
Cancelled reservations are excluded from booked nights. There is one shared exclusion set across every short-term metric, so ADR, Occupancy, RevPAR and ALOS can never disagree about which nights counted.
Occupancy
Occupancy % = Booked nights ÷ Available nights
Nights you blocked for personal use are removed from the DENOMINATOR. Leaving them in would quietly depress the occupancy of any property you actually use.
RevPAR
RevPAR = Total revenue ÷ Available nights
Revenue per available night rather than per booked night — so an empty calendar shows up honestly instead of being hidden by a high ADR on a handful of stays.
Average Length of Stay (ALOS)
ALOS = Booked nights ÷ Reservation count
Also the input to the short-stay classification view, which is why it is computed from the same night set as everything above.
Personal-use nights1
Threshold = the greater of 14 nights, or 10% of rental nights (rounded down)
IRC §280A sets a personal-use limit expressed as whichever is greater — 14 nights, or 10% of the nights the property was rented. Keystone IQ counts your blocked personal nights against that threshold and shows where you stand during the year, rather than after it.
It is worth being precise about the direction: this is a maximum, and the software takes the greater of the two values, never the lesser. The 10% figure is rounded down, matching the implementation.
Keystone IQ counts nights. It does not decide your filing position, and nothing here is a determination about your return.1
Portfolio Health Score
One 0–100 number per property, and a portfolio roll-up. It is a weighted blend of five factors — nothing is hidden, and every input comes from your own ledger and leases.
A property bought within the last six months has its Operating Efficiency and Debt Coverage factors floored at a neutral 75, so normal make-ready spending in the first months does not read as a badly run property.
The score is a summary of your own data, not a rating of the investment.1
Try the math yourself
Every formula above is also available as a free calculator — no signup, and each one shows its own expression and defines every term it uses.
See these numbers on a real portfolio
The live demo runs every formula on a seeded seven-property portfolio.
Disclosures
- 1.Tax. Not tax advice. Consult a qualified tax advisor for your specific situation. Keystone IQ is a record-keeping and financial-organization tool, not a tax, accounting, legal, or financial advisor; any Schedule E, Schedule C, or Form 8825 output is a draft to review with your tax professional.
- 2.Investment metrics. For informational purposes only. Not investment, tax, or financial advice.
- 3.Property valuation. Automated estimate, not an appraisal. Actual market value may differ.