1. What is the Rental Property Calculator?

The Rental Property Calculator helps landlords evaluate potential real estate investments by calculating monthly cash flow from rental properties in their area.

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 expenses (maintenance, taxes, insurance, etc.)
• Mortgage Payment — Monthly principal and interest payment

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

3. Importance of Cash Flow Calculation

Details: Calculating cash flow helps landlords determine if a property will be profitable, assess risk, and make informed investment decisions.

4. Using the Calculator

Tips: Enter all values in dollars. Include all potential expenses for accurate results. Consider vacancy rates when estimating income.

5. Frequently Asked Questions (FAQ)

Q1: What's considered good cash flow for a rental property?
A: Generally $100-$200 per door is good for single-family, while multifamily properties may have lower per-unit cash flow but higher totals.

Q2: Should I include property management fees in expenses?
A: Yes, even if you self-manage initially, include standard management fees (8-12% of rent) for accurate projections.

Q3: How do I account for vacancies?
A: Either reduce annual income by 5-10% or include vacancy as a monthly expense (e.g., 1 month's rent divided by 12).

Q4: What expenses are often overlooked?
A: Capital expenditures (roof, HVAC replacement), turnover costs, and local licensing fees are commonly forgotten.

Q5: Is positive cash flow always better?
A: Not necessarily. Some investors accept negative cash flow for properties with high appreciation potential or tax benefits.