Rental Property Cash Flow Calculator
Analyze potential real estate deals by calculating monthly cash flow, cap rate, and cash-on-cash return.
Monthly Mortgage P&I:
$0.00
Total Monthly Expenses:
$0.00
Net Operating Income (Monthly):
$0.00
Monthly Cash Flow:
$0.00
Cash on Cash Return:
0.00%
Cap Rate:
0.00%
Total Cash Needed to Close:
$0.00
Understanding Rental Property Cash Flow
Cash flow is the lifeblood of any rental real estate investment. It represents the net amount of money that flows into or out of your pocket every month after all operating expenses and mortgage payments have been made. A positive cash flow indicates a profitable investment that generates passive income, while negative cash flow means the property costs you money to hold.
How This Calculator Works
This calculator provides a comprehensive analysis of a potential rental property deal by looking at three specific financial components:
- Initial Investment: Calculates the total cash required to close the deal, including the down payment and closing costs.
- Operating Expenses: Aggregates all ongoing costs such as property taxes, insurance, maintenance, repairs, and property management fees.
- Debt Service: Computes the monthly principal and interest payment based on your loan terms.
Key Metrics Explained
To evaluate whether a deal is worth your time and capital, you should focus on these key performance indicators (KPIs):
1. Cash on Cash Return (CoC)
This metric measures the annual return on the actual cash you invested. It is calculated by dividing the annual pre-tax cash flow by the total cash invested. A CoC return of 8-12% is often considered a solid benchmark for residential real estate investing.
2. Cap Rate (Capitalization Rate)
Cap rate measures the natural rate of return of the property assuming it was bought with all cash (no loan). It is calculated by dividing the Net Operating Income (NOI) by the purchase price. This helps compare the profitability of different properties regardless of how they are financed.
3. Net Operating Income (NOI)
NOI is the total income the property generates minus all necessary operating expenses. Note that NOI excludes mortgage payments, capital expenditures, and income taxes.