Rental Property Cash Flow Calculator
Calculate the true monthly and annual cash flow on a rental property after mortgage, taxes, insurance, vacancy, repairs, and property management. See your cash-on-cash return to decide whether the deal clears a reasonable hurdle rate.
What Is Rental Cash Flow?
Rental cash flow is the money left in your pocket each month after the property pays all of its operating expenses and debt service. It equals gross rent minus vacancy, minus operating expenses (taxes, insurance, HOA, maintenance, management), minus the mortgage principal and interest payment. Positive cash flow means the rental pays for itself and puts money in your pocket; negative cash flow means you feed the property from other income.
The 50% Rule and Real Operating Expenses
Experienced investors often use the 50% rule: assume that half of gross rent will be eaten by operating expenses (not including mortgage). This captures property tax, insurance, vacancy, repairs, capital expenditures, and management fees. On a $2,000/month rental, only about $1,000 remains for debt service and cash flow. This calculator lets you enter each line item explicitly rather than using the rule of thumb.
Vacancy, Repairs, and CapEx Reserves
Three categories are commonly under-budgeted. Vacancy typically costs 5-10% of gross rent even in strong markets because of tenant turnover. Ongoing repairs average 5-10% of rent. Capital expenditures (roof, HVAC, appliances) amortize to 5-10% over a property's life. Skipping these lines produces a rosy cash-flow number that reverses the first time a water heater dies.
What Is a Good Cash-on-Cash Return?
Cash-on-cash return (annual cash flow ÷ cash invested) is the income yield on your actual money-in. Long-term investors often target 8-12% for stabilized single-family rentals. Value-add deals aim for 15%+ to compensate for execution risk. Below about 5% cash-on-cash, the deal depends heavily on appreciation — which may or may not materialize — so cash-flow-focused investors typically pass.
Frequently Asked Questions
What counts as good rental cash flow?
Investors generally aim for $100-$300 per door per month in positive cash flow after all real expenses, or at minimum an 8-12% cash-on-cash return. Markets with strong appreciation may accept lower cash flow; cash-flow markets like the Midwest often target higher numbers.
What is the 1% rule?
The 1% rule is a quick screen: monthly rent should be at least 1% of purchase price (e.g., a $200K property should rent for $2,000+). It is a starting filter, not a final decision — in high-price markets the rule rarely holds, so investors lean on detailed cash-flow analysis like this calculator.
Why include CapEx reserves?
Capital expenditures (roof, HVAC, appliances, water heater) do not happen monthly, but they absolutely happen. Amortizing them at 5-10% of rent prevents the cash-flow number from lying. A property showing $400/month cash flow without CapEx may actually break even when you set aside for a $15,000 roof in year 8.
Should I self-manage to skip the management fee?
Self-management can add 8-10% of rent back to cash flow but costs 2-4 hours per month per door plus occasional bigger time investments for turnovers and evictions. Include management in your underwriting even if you self-manage — your time has value and you may want to hire a manager later.
Does cash flow include appreciation?
No. Cash flow is operating income only. Total return on a rental also includes appreciation, loan paydown (equity built from mortgage amortization), and tax benefits (depreciation deduction). A property with modest cash flow can still generate 12-15% total returns when all four drivers are counted.
How does vacancy affect cash flow?
Vacancy is the biggest variable expense on most rentals. A 5% vacancy rate on $2,000 rent costs $100/month; a 15% rate costs $300/month — enough to flip a property from cash-positive to cash-negative. Underwrite conservatively (7-10%) and choose locations with stable tenant demand.