1. What is Rental Cash Flow?

Rental cash flow is the net amount of money that remains after all expenses and mortgage payments are deducted from rental income. It's a key metric for evaluating the profitability of a rental property.

2. How Does the Calculator Work?

The calculator uses the cash flow formula:

Where:

• Rental Income — Total monthly rent collected from tenants
• Expenses — All property-related expenses (maintenance, taxes, insurance, etc.)
• Mortgage Payment — Monthly principal and interest payment

Explanation: Positive cash flow indicates the property generates profit, while negative cash flow means it's operating at a loss.

3. Importance of Cash Flow Calculation

Details: Calculating cash flow helps landlords assess property profitability, make informed purchase decisions, and manage ongoing property finances effectively.

4. Using the Calculator

Tips: Enter all values in dollars. Include all regular expenses but exclude one-time costs. Mortgage payment should include principal and interest only.

5. Frequently Asked Questions (FAQ)

Q1: What's considered good cash flow for a rental property?
A: Generally $100-$200 per door is considered good, but this varies by market and property type.

Q2: Should I include vacancy in expenses?
A: Yes, a common practice is to include 5-10% of rental income as a vacancy allowance.

Q3: What expenses should I include?
A: Include property taxes, insurance, maintenance, repairs, utilities (if paid by landlord), property management, and capital expenditures.

Q4: How does cash flow differ from ROI?
A: Cash flow measures monthly profit, while ROI (Return on Investment) calculates annual return as a percentage of total investment.

Q5: Can cash flow be negative?
A: Yes, negative cash flow means expenses exceed income, which may be acceptable if property appreciation is expected.