Rental Cash Flow Calculator

What is rental cash flow?

Cash flow is the money left over each month after a rental property’s income covers all of its costs, including the mortgage. Positive cash flow means the property pays you. Negative cash flow means you add your own money every month to keep it running, even if the property is gaining value.

How to calculate cash flow

Monthly cash flow = Rental income − Operating expenses − Mortgage payment

1. Income. Rent from every unit plus other income such as parking, laundry, or pet rent.
2. Operating expenses. Property taxes, insurance, repairs and maintenance, property management, utilities you pay, HOA fees, and a vacancy allowance.
3. Mortgage payment. The principal and interest on any loan.

Example: a single-family rental brings in $2,000 a month. Taxes, insurance, repairs, management, and vacancy add up to $750, and the mortgage payment is $900. Monthly cash flow is 2,000 − 750 − 900 = $350, or $4,200 a year.

Key numbers to check

• Net operating income (NOI): income minus operating expenses, before the mortgage.
• Cap rate: NOI divided by the property price. Compare properties with the Cap Rate Calculator.
• Cash-on-cash return: yearly cash flow divided by the cash you invested, such as the down payment and closing costs. With $4,200 of yearly cash flow on $50,000 invested, it is 8.4%.

Frequently asked questions

How much should I budget for repairs and vacancy?

Many landlords set aside about 5% to 10% of rent for repairs and another 5% to 10% for vacancy, then adjust for the age of the property and how quickly units rent in the area.

What is a good cash flow for a rental property?

It depends on your goals and market. Many investors look for cash flow that stays positive after reserves for repairs, vacancy, and large replacements such as roofs and water heaters are set aside.

Is cash flow the same as profit?

Not quite. Cash flow counts only the money that actually moves in and out of your account each month, including the principal part of the mortgage payment. Profit on paper can be different, because some items, such as the equity you build as the loan is paid down, never show up as cash.

How do I track real cash flow after I buy?

Record every rent payment and expense as it happens, then review income and expense reports each month. See the Financial Reports Step-by-Step Guide and compare returns with the Rental ROI Calculator.