Does Your Rental Deal Actually Pencil? (We Run The Real Numbers)

A rental property can feel safer than the stock market because you can touch it, but the math doesn't care how tangible it feels. In this episode, we walk through a real rental deal in St. George, Utah and ask the only question that matters: does the deal pencil? We run a full analysis model including vacancy, property management, capex reserves, taxes, insurance, and transaction costs—showing how a property can look "fine" on the surface and still deliver weak cash flow and negative NPV.

We explain why if there's no room for a property manager, you're not buying an investment, you're buying a job. Then we zoom out to the big drivers most people ignore: interest rates, discount rates, opportunity cost, and why cap rates matter when prices detach from what rents can support. We tackle the common pushback—"but home prices always rise"—and break down why appreciation can only decouple so far from fundamentals, especially when affordability is stretched and rents soften.

We finish with nuance: real estate CAN work as a tail hedge in extreme inflation scenarios when you use leverage, but that's not a great primary plan for most households. We also introduce our favorite filter: return on hassle—because an extra percent isn't worth it if the liability, time, and tax complexity take over your life.

KEY TOPICS:
Recency bias in real estate 
Full deal setup walkthrough 
Vacancy & property management costs 
Capex reserves & turnover 
Discount rate & NPV analysis 
Cap rate reality check 
Interest rates & affordability constraints
Real estate as leverage hedge 
Liquidity risk & return on hassle

Find Du Charme Wealth Management here:
https://ducharmewealth.com

Phone: 
(435) 288-3396

DISCLAIMER:
Information presented on this program is believed to be factual and up-to-date, but we do not guarantee its accuracy, and it should not be regarded as a complete analysis of the subjects discussed. Discussions and answers to questions do not involve the rendering of personalized investment advice, but are limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the options presented. Encompass More Asset Management LLC is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC) and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements.

[00:00:00] Welcome And Deal Mindset
[00:06:35] Deal Setup And Financing Assumptions
[00:17:53] Discount Rate NPV And Cap Rate
[00:23:42] Appreciation Limits And Having An Edge
[00:30:39] Why Higher Rates Change Everything
[00:47:10] Liquidity Shocks And Tenant Risk
[00:56:20] Return On Hassle And Getting Advice
[01:02:10] Recap And Listener Questions