Rental Property Cash Flow Calculator
Purchase & Loan Details
Income Details
Monthly Expenses
Monthly Cash Flow
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Net Operating Income (NOI) / Month
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Total Monthly Expenses
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Monthly Mortgage Payment
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Cash on Cash Return
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Cap Rate
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Understanding Your Rental Property Cash Flow Analysis
Investing in real estate is one of the most reliable ways to build wealth, but the difference between a profitable investment and a financial burden often comes down to one metric: Cash Flow. Our Rental Property Cash Flow Calculator is designed to give investors a granular look at the profitability of a potential purchase by accounting for income, vacancies, mortgages, and operating expenses.
Why Cash Flow is King
Cash flow represents the net amount of money moving in and out of your rental business each month. Positive cash flow means your property is generating income after all bills are paid, providing you with passive income and a safety net for future repairs. Negative cash flow, conversely, means you are paying out of pocket to hold the asset.
When analyzing a deal, you must look beyond just the rent and the mortgage. Hidden costs like vacancy rates (the time the property sits empty), property management fees, and maintenance set-asides can quickly erode potential profits.
Key Metrics Explained
- Net Operating Income (NOI): This is your total income minus operating expenses, excluding the mortgage. It measures the profitability of the property itself, regardless of financing.
- Cash on Cash Return: This is arguably the most important metric for ROI. It calculates the annual cash flow divided by the total cash invested (Down payment + Closing costs). A return of 8-12% is generally considered strong in many markets.
- Cap Rate: The Capitalization Rate is the NOI divided by the property's purchase price. It helps compare the profitability of different properties assuming they were bought with all cash.
Estimating Expenses Correctly
One of the biggest mistakes new investors make is underestimating expenses. Always account for:
- Vacancy: Even in hot markets, assume 5-8% vacancy to account for turnover time.
- Maintenance: Set aside 10-15% of the rent for repairs, even if the house is new. Roofs, HVAC systems, and water heaters eventually need replacing.
- CapEx (Capital Expenditures): Major renovations or replacements that differ from routine maintenance.
Use the calculator above to run multiple scenarios. What happens if the interest rate rises by 1%? What if the insurance premium doubles? rigorous analysis helps you make data-driven investment decisions.