Rental Property Cash Flow Calculator
Purchase & Loan Details
30 Years
15 Years
10 Years
Income & Operating Expenses
Variable Expenses (Estimates)
Monthly Cash Flow Analysis
Gross Monthly Income:
$0.00
Principal & Interest (Mortgage):
$0.00
Total Operating Expenses:
$0.00
Net Monthly Cash Flow:
$0.00
Investment Metrics
Net Operating Income (NOI – Annual):
$0.00
Cash on Cash Return:
0.00%
Cap Rate:
0.00%
What is Rental Property Cash Flow?
Rental property cash flow is the net amount of money remaining after all expenses related to the property have been paid from the monthly rental income. It is the lifeblood of real estate investing, determining whether an asset is a liability (costing you money) or an asset (generating income).
Calculating accurate cash flow involves more than just subtracting the mortgage from the rent. Experienced investors must account for "hidden" costs like vacancy, capital expenditures (replacing a roof or HVAC), and property management fees.
How to Use This Calculator
Our Rental Property Calculator breaks down expenses into fixed and variable categories to give you a realistic view of your investment potential:
- Operating Expenses: These include taxes, insurance, HOA fees, and property management. These are recurring costs required to keep the property running.
- Variable Expense Reserves: We calculate costs for Vacancy, Repairs, and CapEx as a percentage of gross rent. Setting aside this money monthly prevents financial shock when major repairs are needed.
- Debt Service: The principal and interest payments on your loan.
Understanding the Metrics
Cash on Cash Return (CoC)
This metric measures the annual return on the actual cash you invested (Down Payment + Closing Costs). It is calculated as:
(Annual Cash Flow / Total Cash Invested) × 100
A good Cash on Cash return varies by market, but many investors target 8% to 12% or higher.
Net Operating Income (NOI)
NOI is the annual income generated by the property after deducting all operating expenses but before deducting mortgage payments and taxes. It is a crucial figure used to determine the profitability of the property irrespective of financing.
Cap Rate (Capitalization Rate)
Cap Rate measures the natural rate of return of a real estate investment assuming it was bought in cash. It allows you to compare different properties across different markets without the variable of financing.
Cap Rate = (Net Operating Income / Current Market Value) × 100
Why Cash Flow Matters
Positive cash flow provides a buffer against market downturns. Even if property values decrease, a property that generates positive cash flow can be held indefinitely without draining your personal finances. Conversely, negative cash flow implies you are subsidizing the tenant's living costs, which is a risky position for any investor.