What is Interest Rate in Option Calculator

Rental Property Monthly Cash Flow Calculator

Income & Loan Data

Typically 5-8%

Monthly Operating Expenses

Typically 5-15%

Typically 8-10% if managed professionally

Monthly Financial Snapshot

Gross Scheduled Income: $0.00

Less: Vacancy Loss: -$0.00

Effective Gross Income (EGI): $0.00

Operating Expenses

Taxes & Insurance: $0.00

Maintenance Reserve: $0.00

Property Management: $0.00

Total Operating Expenses: -$0.00

Net Operating Income (NOI): $0.00

Less: Mortgage Payment (Debt Service): -$0.00

Estimated Monthly Cash Flow: $0.00

function calculateRentalCashFlow() { // 1. Get Inputs and validate var grossRentInput = document.getElementById("rpcf_gross_rent").value; var mortgageInput = document.getElementById("rpcf_mortgage").value; var vacancyRateInput = document.getElementById("rpcf_vacancy_rate").value; var taxesInput = document.getElementById("rpcf_taxes").value; var insuranceInput = document.getElementById("rpcf_insurance").value; var maintenanceRateInput = document.getElementById("rpcf_maintenance_rate").value; var managementRateInput = document.getElementById("rpcf_management_rate").value; // Parse floats, defaulting to 0 if empty or invalid var grossRent = parseFloat(grossRentInput) || 0; var mortgage = parseFloat(mortgageInput) || 0; var vacancyRate = parseFloat(vacancyRateInput) || 0; var taxes = parseFloat(taxesInput) || 0; var insurance = parseFloat(insuranceInput) || 0; var maintenanceRate = parseFloat(maintenanceRateInput) || 0; var managementRate = parseFloat(managementRateInput) || 0; if (grossRent = 0) { finalCashFlowElement.style.color = "#2e7d32"; // Green } else { finalCashFlowElement.style.color = "#d9534f"; // Red } // Show results container document.getElementById("rpcf_results_area").style.display = "block"; }

Understanding Rental Property Cash Flow

Cash flow is the lifeblood of any rental property investment. It represents the net amount of cash moving in or out of your investment business each month. Positive cash flow means your property is generating more income than it costs to operate and finance, providing you with passive income and a safety net for unexpected repairs. Negative cash flow means you are feeding the investment from your own pocket every month.

Accurately calculating cash flow before purchasing a property is crucial to ensure you are making a sound investment decision. This calculator breaks down the process into the standard real estate industry formula.

How the Calculation Works

The formula for calculating rental property cash flow involves several steps to peel back the layers of expenses from your gross income:

1. Gross Scheduled Income (GSI): This is the total potential income if the property were 100% occupied at market rents, plus any other income (like laundry or parking fees).
2. Effective Gross Income (EGI): Realistically, a property won't be occupied every single day. We subtract a percentage for estimated Vacancy Loss to determine the actual revenue you expect to collect.
3. Net Operating Income (NOI): From the EGI, we subtract all Operating Expenses. These include property taxes, insurance, maintenance reserves, and property management fees. Note that mortgage payments are NOT operating expenses.
4. Cash Flow: Finally, we subtract the Debt Service (your monthly principal and interest mortgage payment) from the NOI. The remaining amount is your pre-tax monthly cash flow.

Example Calculation

Let's look at a realistic scenario for a single-family rental home:

• Gross Rent: $2,000 per month
• Vacancy Rate: 5% ($100 loss)
• Effective Gross Income: $1,900 ($2,000 – $100)
• Operating Expenses:
  • Taxes & Insurance: $400
  • Maintenance Reserve (10% of Gross Rent): $200
  • Property Management (8% of EGI): $152
  • Total OpEx: $752
• Net Operating Income (NOI): $1,148 ($1,900 – $752)
• Mortgage Payment: $950
• Final Monthly Cash Flow: $198 ($1,148 – $950)

In this example, the property generates a positive cash flow of $198 per month after all expenses and loan obligations are met.