Property Cash Flow Calculator
Calculates the monthly cash flow from a rental property by subtracting mortgage and operating expenses from rental income. Investors use it to quickly determine whether a property will generate positive or negative monthly income.
About this calculator
Monthly cash flow is the money left over from a rental property after all recurring costs are paid. The formula is: Cash Flow = Monthly Rent − Monthly Mortgage − Monthly Operating Expenses. Operating expenses typically include property taxes, insurance, property management fees, maintenance reserves, and utilities paid by the landlord. A positive cash flow means the property puts money in your pocket each month; a negative cash flow (cash flow drain) means you must supplement it from other income. Even a modestly positive cash flow of $200–$300 per month can compound significantly across a portfolio of multiple properties, making this metric central to buy-and-hold real estate investing.
How to use
Suppose a rental property earns $2,200 per month in rent. The monthly mortgage payment (principal + interest) is $1,100, and monthly operating expenses — including insurance ($80), taxes ($150), maintenance reserve ($100), and property management ($176, roughly 8% of rent) — total $506. Apply the formula: Cash Flow = $2,200 − $1,100 − $506 = $594 per month. This property generates a healthy $594/month in net cash flow, or approximately $7,128 per year, before accounting for income taxes.
Frequently asked questions
What is considered a good monthly cash flow for a rental property?
Most real estate investors target at least $100–$200 per unit per month in positive cash flow as a minimum threshold, with $300–$500 being considered solid. The right target depends on your market, property price, and investment goals — some investors accept lower cash flow in appreciation-heavy markets. Cash-on-cash return (annual cash flow divided by total cash invested) is a related metric that puts monthly cash flow in context relative to your actual investment size.
How do operating expenses affect rental property cash flow calculations?
Operating expenses are often underestimated by new investors, which leads to overly optimistic cash flow projections. A commonly used rule of thumb is the 50% rule — approximately 50% of gross rental income will go toward operating expenses (excluding mortgage). These costs include vacancy allowances, repairs, insurance, property taxes, and management fees. Accurately estimating expenses is critical; underestimating by even $200/month can turn a profitable property into a cash flow drain.
Why can a rental property show accounting profit but still have negative cash flow?
Accounting profit includes non-cash deductions like depreciation, which reduce taxable income without actually requiring a cash outlay. Conversely, mortgage principal payments reduce debt but are not an operating expense on an income statement. A property might show a paper profit after depreciation deductions while still consuming more cash than it generates if the mortgage payment is high. This is why cash flow — not accounting profit — is the key metric investors use to evaluate a rental property's day-to-day financial health.