1. What is Rental Property Cash Flow?

Cash flow is the net amount of cash being transferred into and out of a rental property. Positive cash flow indicates the property generates more income than expenses, while negative cash flow means it's costing money to operate.

2. How Does the Calculator Work?

The calculator uses the basic cash flow formula:

Where:

• Rental Income — Total monthly rent collected
• Expenses — All property-related expenses (taxes, insurance, maintenance, etc.)
• Mortgage — Monthly mortgage payment (principal + interest)

Explanation: This simple calculation helps investors evaluate whether a property will generate positive monthly cash flow.

3. Importance of Cash Flow Calculation

Details: Positive cash flow is essential for long-term rental property success. It ensures the property pays for itself and generates profit, helping investors weather vacancies and unexpected expenses.

4. Using the Calculator

Tips: Enter all values in USD. Be sure to include all expenses - property taxes, insurance, maintenance, repairs, vacancies, property management fees, and any other recurring costs.

5. Frequently Asked Questions (FAQ)

Q1: What's considered good cash flow?
A: This varies by market, but generally $100-$200 per door is considered decent, with $300+ being excellent.

Q2: Should I include principal payments in cash flow?
A: Yes, the entire mortgage payment (P&I) should be included as it's cash leaving your account each month.

Q3: How do I estimate expenses?
A: The 50% Rule suggests expenses (excluding mortgage) will be about 50% of rental income for long-term averages.

Q4: What about tax benefits?
A: While depreciation and interest deductions help at tax time, cash flow focuses on actual monthly money in/out.

Q5: Is positive cash flow always better?
A: Not necessarily - some investors accept negative cash flow for properties with strong appreciation potential.