Rental Property Cash Flow Calculator
Analyze the profitability of your real estate investment instantly.
Property Details
Expenses
Investment Performance
Understanding Rental Property Cash Flow
When investing in real estate, calculating your cash flow is the most critical step in determining if a property is a viable asset. **Positive cash flow** means that the property generates more income than it costs to operate, putting money into your pocket every month. Conversely, negative cash flow implies you must pay out of pocket to hold the asset, which increases your financial risk.
This Rental Property Calculator takes into account not just the mortgage, but the "hidden" costs of ownership such as vacancy rates, repair reserves, and insurance, giving you a realistic picture of your potential returns.
Key Metrics Explained
The net amount of cash moving in or out of the investment each month. Calculated as Total Income – Total Expenses.
Measures the annual return on the actual cash you invested (down payment + closing costs). It helps compare real estate to other investments like stocks.
Calculated as NOI / Purchase Price. It represents the potential return on an investment assuming you paid all cash, useful for comparing properties regardless of financing.
How to Interpret the Results
A "good" return depends on your strategy and local market. Generally, investors look for a Cash on Cash ROI between 8-12% for long-term rentals. If your Monthly Cash Flow is negative, re-evaluate your offer price, check if the rent is too low, or investigate if expenses (like HOA or taxes) are too high for the deal to make sense.
The 50% Rule and 1% Rule
While this calculator provides exact figures, investors often use "rules of thumb" for quick screening. The 1% Rule suggests that monthly rent should be at least 1% of the purchase price. The 50% Rule estimates that 50% of your rental income will go toward operating expenses (excluding the mortgage payment). Use the calculator above to verify these estimates with real numbers.