1. What is Rental Property Cash Flow?

Cash flow is the net amount of cash moving in and out of a rental property investment. Positive cash flow indicates profitability, while negative cash flow means the property is costing money to maintain.

2. How Does the Calculator Work?

The calculator uses the basic cash flow formula:

Where:

• Rental Income — Total monthly rent collected from tenants
• Expenses — All property-related costs (maintenance, taxes, insurance, etc.)
• Mortgage Payment — Monthly loan payment for the property

Explanation: This simple calculation shows whether a property generates positive monthly income after all obligations are paid.

3. Importance of Cash Flow Calculation

Details: Positive cash flow is essential for long-term real estate investing success. It ensures the property can sustain itself and provides income to the investor.

4. Using the Calculator

Tips: Enter all values in dollars. Be sure to include all expenses - property management, repairs, vacancies, capital expenditures, and other operating costs.

5. Frequently Asked Questions (FAQ)

Q1: What is considered good cash flow?
A: Generally $100-$200 per door per month is good, but depends on location and property value. Aim for at least 6-8% cash-on-cash return.

Q2: Should I include principal payments in expenses?
A: No, the entire mortgage payment (principal + interest) is already accounted for separately in the calculation.

Q3: How do I estimate expenses?
A: A good rule of thumb is 50% of rental income for expenses (excluding mortgage), but this varies by property type and location.

Q4: What if I pay cash for the property?
A: Simply leave mortgage payment as $0. Your cash flow will be higher but your overall return may be lower due to opportunity cost.

Q5: Should I include tax benefits?
A: This calculator shows pre-tax cash flow. Tax benefits like depreciation can improve after-tax returns but aren't included here.