Rental Property Cash Flow Calculator
Purchase Information
Rental Income
Recurring Expenses
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Monthly Cash Flow
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Cash on Cash Return
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Monthly Breakdown
Net Operating Income (NOI)
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Mortgage Payment (P&I)
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Total Monthly Expenses
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Initial Cash Investment
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Understanding Rental Property Cash Flow
Investing in real estate is one of the most reliable ways to build wealth, but simply buying a property and renting it out doesn't guarantee a profit. To succeed, investors must accurately calculate Cash Flow. This Rental Property Cash Flow Calculator helps you analyze a potential investment deal by factoring in income, mortgage payments, and hidden operating expenses.
What is Cash Flow?
Cash flow is the net amount of money moving in and out of a business. In real estate, it is the money left over after all operating expenses and debt service (mortgage payments) have been paid.
Formula: Cash Flow = Gross Rental Income – (Operating Expenses + Mortgage Payment)
A positive cash flow means the property is generating income for you every month. A negative cash flow means the property is costing you money to hold, which is generally risky unless there is significant appreciation potential.
Key Metrics Calculated
- NOI (Net Operating Income): The annual income generated by the property after deducting all operating expenses (vacancy, taxes, insurance, maintenance) but before deducting mortgage payments. This measures the property's profitability regardless of how it is financed.
- Cash on Cash Return (CoC): This is arguably the most important metric for ROI. It measures the annual cash flow relative to the total cash invested (Down payment + closing costs + rehab costs). A CoC return of 8-12% is often considered good in the stock market, but real estate investors often aim for higher due to the active nature of the investment.
- Vacancy Rate: You won't have a tenant 100% of the time. It is standard practice to budget 5-8% of gross rent for vacancy to account for turnover periods.
- CapEx & Maintenance: Roofs leak and water heaters break. Smart investors set aside 10-15% of monthly rent into a reserve fund for repairs.
How to Interpret the Results
If the Monthly Cash Flow is green, the property pays for itself and provides passive income. If it is negative, evaluate if the rent is too low, the purchase price is too high, or if the operating expenses are overestimated. The Cash on Cash Return allows you to compare this real estate investment against other opportunities like stocks or bonds.