Rental Property Cash Flow Calculator
Analyze your potential real estate investment profitability in seconds.
How to Use the Rental Property Cash Flow Calculator
Investing in real estate requires more than just a gut feeling. To ensure a property is a "deal," you must run the numbers. Our Rental Property Cash Flow Calculator helps investors determine the monthly profit (or loss) and the overall return on investment (ROI).
Key Metrics Explained
- Purchase Price: The total cost to buy the property.
- Down Payment: The actual cash you are putting into the deal upfront. This is used to calculate your Cash on Cash return.
- Monthly Mortgage (P&I): Your principal and interest payment to the lender.
- Maintenance & Vacancy: Smart investors set aside 5-15% of gross rent for repairs and periods where the unit might be empty.
Real-World Investment Example
Imagine you purchase a duplex for $250,000 with a $50,000 down payment. You rent both sides for a total of $2,200 per month. Your mortgage is $1,100, taxes and insurance are $300, and you set aside 10% ($220) for maintenance.
Your total expenses would be $1,620. Your net monthly cash flow would be $580. Annually, this is $6,960 profit. Divided by your $50,000 down payment, your Cash on Cash return is 13.92%—a very strong investment!
Why Cash Flow Matters Over Appreciation
While property values generally increase over time (appreciation), cash flow is what pays the bills today. Positive cash flow provides a safety net during market downturns, allowing you to hold the property indefinitely. Negative cash flow, often called "alligator property," can drain your personal finances and lead to forced sales in bad markets.