Rental Property Cash Flow Calculator
Analyze your real estate investment deal instantly.
Purchase Information
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Income & Expenses
Investment Analysis
Monthly Cash Flow
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Cash on Cash Return
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Cap Rate
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Total Monthly Expenses
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NOI (Annual)
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Monthly Mortgage
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Understanding Rental Property Cash Flow
Investing in real estate is one of the most powerful ways to build wealth, but the numbers must make sense. A Rental Property Cash Flow Calculator is an essential tool for investors to determine the viability of a potential investment property. It moves beyond simple rent-minus-mortgage math to account for the true costs of ownership.
What is Cash Flow in Real Estate?
Cash flow is the net income from a real estate investment after mortgage payments and operating expenses have been made. Positive cash flow indicates that the property is generating profit, while negative cash flow means you are losing money every month to hold the asset.
The formula for cash flow is simple:
- Gross Income: Total rent collected + other income (laundry, parking).
- Operating Expenses: Taxes, insurance, maintenance, vacancy, property management, HOA.
- Debt Service: The principal and interest payments on your loan.
Cash Flow = Gross Income – Operating Expenses – Debt Service
Key Metrics: CoC Return and Cap Rate
While cash flow tells you your monthly profit, two other metrics help you compare investments:
1. Cash on Cash (CoC) Return
This metric measures the annual return you made on the cash you actually invested. It is calculated by dividing your annual pre-tax cash flow by the total cash invested (Down Payment + Closing Costs + Rehab Costs). A "good" CoC return varies by market, but many investors target 8-12%.
2. Capitalization Rate (Cap Rate)
The Cap Rate measures a property's natural rate of return assuming it was bought with all cash. It allows you to compare properties regardless of financing. It is calculated by dividing the Net Operating Income (NOI) by the Purchase Price. Note that mortgage payments are NOT included in NOI.
The 50% Rule and 1% Rule
When quickly screening properties, investors often use heuristics:
- The 1% Rule: Monthly rent should be at least 1% of the purchase price. For example, a $200,000 home should rent for $2,000/month.
- The 50% Rule: Assume that 50% of your gross rental income will go toward operating expenses (excluding the mortgage). If rent is $2,000, assume you have $1,000 left to pay the mortgage and keep as profit.
While these rules are helpful for quick screening, this calculator provides the granular detail needed for a final investment decision.