Rental Property Cash Flow Calculator
Calculate your monthly profit, capitalization rate, and cash-on-cash return instantly.
Purchase & Loan
Income & Expenses
Estimated Monthly Cash Flow
$0.00
Net Operating Income (NOI) / Month:
$0.00
Mortgage Payment (P&I):
$0.00
Total Monthly Expenses:
$0.00
Cash on Cash Return (CoC):
0.00%
Cap Rate:
0.00%
Understanding Real Estate Cash Flow
Successful real estate investing relies heavily on the numbers. This Rental Property Cash Flow Calculator helps investors analyze potential deals by breaking down income, operating expenses, and financing costs to reveal the true profitability of an asset.
What is Cash Flow?
Cash flow is the net amount of cash moving in and out of a business or investment. In real estate, it is calculated as:
Cash Flow = Total Rental Income – Total Expenses
Positive cash flow indicates that the property generates more income than it costs to own and operate, providing you with passive income. Negative cash flow means the property costs you money every month.
Key Metrics Explained
- NOI (Net Operating Income): This is your annual income minus operating expenses (taxes, insurance, maintenance), excluding mortgage payments. It measures the property's potential profitability regardless of financing.
- Cap Rate (Capitalization Rate): Calculated as (NOI / Purchase Price) × 100. It represents the rate of return on the property if you bought it with all cash. A higher cap rate generally implies higher risk and higher potential return.
- Cash on Cash Return (CoC): This measures the return on the actual cash you invested (down payment + closing costs). It is one of the most important metrics for investors using leverage (mortgages).
The 50% Rule and 1% Rule
Investors often use "rules of thumb" for quick screening:
- The 1% Rule: Suggests that the monthly rent should be at least 1% of the purchase price. For a $300,000 home, rent should be $3,000.
- The 50% Rule: Estimates that 50% of your rental income will go toward operating expenses (excluding mortgage). If rent is $2,000, expect $1,000 in expenses.
While these rules are helpful for filtering, this calculator provides the detailed analysis needed before making an offer.