Rental Property Cash Flow Calculator
Purchase & Loan Details
Income & Expenses (Monthly)
Analysis Results
Monthly Mortgage Payment (P&I):
$0.00
Total Monthly Expenses:
$0.00
Net Operating Income (NOI) / Month:
$0.00
Monthly Cash Flow:
$0.00
Cap Rate:
0.00%
Cash on Cash Return (ROI):
0.00%
Understanding Rental Property Cash Flow Analysis
Investing in real estate is one of the most reliable ways to build wealth, but simply buying a property doesn't guarantee a profit. To succeed, investors must understand the numbers behind the deal. This Rental Property Cash Flow Calculator is designed to help you evaluate the profitability of a potential investment by analyzing income, expenses, and financing costs.
What is Positive Cash Flow?
Positive cash flow occurs when a property's gross rental income exceeds all of its expenses, including the mortgage, taxes, insurance, and maintenance costs. It is essentially the "net profit" you pocket every month. Achieving positive cash flow ensures that the asset pays for itself while potentially providing you with passive income.
Key Metrics Calculated
- Net Operating Income (NOI): This represents the profitability of the property before financing costs are considered. It is calculated by subtracting operating expenses (vacancy, taxes, insurance, repairs) from the effective rental income.
- Cap Rate (Capitalization Rate): A fundamental metric used to compare different real estate investments. It is calculated by dividing the annual NOI by the property's purchase price. A higher Cap Rate generally indicates a better return, though it may come with higher risk.
- Cash on Cash Return (CoC): This measures the return on the actual cash you invested (down payment + closing costs + rehab costs). It is crucial for understanding how hard your money is working for you compared to other investment vehicles like stocks or bonds.
Estimating Expenses Accurately
One of the biggest mistakes new investors make is underestimating expenses. Beyond the mortgage payment, you must account for:
- Vacancy Rate: Properties won't be occupied 100% of the time. A standard conservative estimate is 5-8% of gross rent.
- Maintenance & CapEx: Even if a house is new, things break. Setting aside 10-15% of rent for repairs and capital expenditures (like a new roof or HVAC) is prudent.
- Property Management: If you don't plan to be a landlord yourself, expect to pay a manager 8-10% of the monthly rent.
Use the calculator above to adjust these variables and perform a "stress test" on your investment. If a deal still shows positive cash flow with high vacancy or repair estimates, it is likely a solid investment opportunity.