1. What is Rental Property Cash Flow?

Cash flow is the net amount of cash being transferred into and out of a rental property. It's calculated by subtracting all expenses from the rental income. Positive cash flow indicates profitability while negative cash flow means the property is losing money.

2. How Does the Calculator Work?

The calculator uses the basic cash flow formula:

Where:

• Rental Income — Total monthly or annual income from the property
• Expenses — All costs associated with the property including mortgage, taxes, maintenance, etc.

Explanation: This simple calculation helps investors determine whether a property will generate positive or negative cash flow.

3. Importance of Cash Flow Calculation

Details: Cash flow analysis is crucial for real estate investors to evaluate property profitability, assess risk, and make informed investment decisions.

4. Using the Calculator

Tips: Enter rental income and expenses in USD. Both values must be positive numbers. The calculator will show your monthly cash flow.

5. Frequently Asked Questions (FAQ)

Q1: What expenses should be included?
A: Include mortgage payments, property taxes, insurance, maintenance, vacancies, property management fees, and any other regular expenses.

Q2: What is considered good cash flow?
A: This varies by market, but generally $100-$200 per door per month is considered good for single-family rentals.

Q3: Should I calculate monthly or annual cash flow?
A: Most investors calculate monthly cash flow since expenses and income typically occur monthly.

Q4: Does this include capital expenditures?
A: This basic calculator doesn't account for capital expenditures. For more accurate analysis, you may want to include a capex reserve.

Q5: How does cash flow differ from profit?
A: Cash flow measures actual money in/out, while profit is an accounting concept that includes non-cash items like depreciation.