1. What is Property Cash Flow?

Property cash flow is the net amount of cash generated by an investment property after accounting for all expenses and debt payments. It's a key metric for evaluating the profitability of rental properties.

2. How Does the Calculator Work?

The calculator uses the cash flow formula:

Where:

• \( Rental\ Income \) — Total monthly rental income from the property
• \( Expenses \) — All property-related expenses (taxes, insurance, maintenance, etc.)
• \( Debt\ Service \) — Mortgage payments and other loan payments

Explanation: Positive cash flow indicates the property generates more income than it costs to operate, while negative cash flow means it's costing money each month.

3. Importance of Cash Flow Calculation

Details: Calculating cash flow helps investors determine if a property will be profitable, assess risk, and make informed investment decisions.

4. Using the Calculator

Tips: Enter all values in dollars. Include all rental income, operating expenses, and mortgage/loan payments for accurate results.

5. Frequently Asked Questions (FAQ)

Q1: What's considered good cash flow?
A: This varies by market, but generally $100-$200 per door per month is considered good for single-family rentals.

Q2: Should I include vacancy in expenses?
A: Yes, a vacancy factor (typically 5-10% of rental income) should be included in your expense calculation.

Q3: What expenses should I include?
A: Include property taxes, insurance, maintenance, repairs, property management fees, utilities (if paid by owner), and capital expenditures.

Q4: How does cash flow differ from ROI?
A: Cash flow measures monthly income/expenses, while ROI (Return on Investment) measures annual return relative to total investment.

Q5: Is positive cash flow always better?
A: Not necessarily. Some investors accept negative cash flow for properties with strong appreciation potential or tax benefits.