1. What is Rental Property Cash Flow?

Rental property cash flow is the net amount of money that remains after all expenses and mortgage payments are deducted from the rental income. Positive cash flow indicates profitability, while negative cash flow means the property is operating at a loss.

2. How Does the Calculator Work?

The calculator uses the cash flow formula:

Where:

• \( \text{Rental Income} \) — Total income from rent payments
• \( \text{Expenses} \) — All property-related expenses (taxes, insurance, maintenance, etc.)
• \( \text{Mortgage Payment} \) — Monthly or annual mortgage payment

Explanation: This simple calculation shows how much money the property generates after covering all obligations.

3. Importance of Cash Flow Calculation

Details: Calculating cash flow helps investors determine a property's profitability, assess investment viability, and make informed decisions about property purchases or management.

4. Using the Calculator

Tips: Enter all amounts in dollars, select whether the amounts are monthly or annual figures. Be sure to include all expenses for accurate results.

5. Frequently Asked Questions (FAQ)

Q1: What expenses should be included?
A: Include property taxes, insurance, maintenance, repairs, property management fees, utilities (if paid by owner), and vacancy allowance.

Q2: What is considered good cash flow?
A: This varies by market, but generally $100-$200 per door per month is considered good for single-family rentals.

Q3: Should I calculate monthly or annual cash flow?
A: Monthly is most common since most expenses and mortgage payments occur monthly, but annual can help with long-term planning.

Q4: Does this include tax benefits?
A: No, this is pre-tax cash flow. Tax benefits like depreciation would affect after-tax cash flow.

Q5: What if I have multiple units?
A: Calculate total income and expenses for all units combined to get the property's overall cash flow.