Using financial measures such as cap rate, gross rent multiplier, and cash on cash are paramount to real estate investing.
Real estate investors must be able to determine what the bottom line is on every investment opportunity if they ever hope to make a wise real estate investment decision.
Still, no matter how concise the formulas or reliable the rates of return, the numbers don't always tell the whole truth about the profitability of the property.
In fact, real estate investors must consider seven other factors before passing judgment on a property's value or worthiness.

1. Income upside potential - Can the rents be raised, and if so, by how much, and would it be enough to make a substantial difference? Understanding the income stream (and its potential) of a property is vital to smart real estate investing.
   
2. Deferred maintenance - What is the condition of the property? How much would the buyer have to spend to raise the rents to projected levels, to lower the vacancy, or to make the building safe and sound?
3. Terms - How a property gets financed can make or break a property's rate of return.
   Obviously lower interest means more cash flow.
   Likewise, contract terms might make the property worth more because it eliminates lender fees, appraisal cost, etc.
   
4. Age - This has a direct bearing on future expenditures such as roof, appliances, carpet and vinyl replacement.
   
5. Unit Mix - How many one, two, and three bedroom units are there? This is important when considering market demand and rents.
   
6. Location - The community surrounding the rental property has a direct impact on the property and helps determine tenant mix, market rents, vacancy rates, and ultimately resale value.
   Whereas a building located just steps from the beach would be considered a prime location, one located directly under the flight path of aircraft would not.
   
7. Amenities - Do the units include washer/dryer hookups? Is there a laundry room with coin-operated washers and dryers on the grounds? Is the building a single story or two story? What about parking, are there garages, carports, or open parking? Is there a pool, weight room, recreation center? All of these can have a direct bearing on rents, vacancy rates, and the type of tenants the building attracts.
   

You get the idea.
Yes, rely heavily on the numbers when making your real estate investment decision.
The cash flow, rate of return, and profitability of investment real estate can mean the difference between a winning or losing real estate investing endeavor.
Just remember not to keep your nose so buried in the reports and graphs that you ignore other aspects about the property that may or may not make it a good investment.