Rental Real Estate Cash Flow Calculator
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Reviewed by Calculator Editorial Team
Investing in rental real estate can be profitable, but understanding your cash flow is crucial. This calculator helps you determine your monthly and annual cash flow by analyzing your rental income, expenses, and mortgage payments.
How to Use This Calculator
To calculate your rental real estate cash flow:
- Enter your monthly rental income
- Input your monthly mortgage payment
- Add all other monthly expenses (property taxes, insurance, maintenance, etc.)
- Click "Calculate" to see your results
The calculator will show you your monthly and annual cash flow, as well as a breakdown of your income versus expenses.
Formula Explained
The cash flow calculation is based on the following formula:
Monthly Cash Flow = Monthly Rental Income - (Mortgage Payment + Other Expenses)
Annual Cash Flow = Monthly Cash Flow × 12
This formula helps you understand how much money you're actually keeping each month after all expenses. A positive cash flow indicates profitability, while negative cash flow suggests you need to adjust your expenses or rental price.
Worked Example
Let's look at an example property:
| Item | Amount |
|---|---|
| Monthly Rental Income | $2,500 |
| Mortgage Payment | $1,200 |
| Property Taxes | $150 |
| Insurance | $100 |
| Maintenance | $200 |
| Vacancy Allowance | $100 |
| Total Monthly Expenses | $1,750 |
Using the formula:
Monthly Cash Flow = $2,500 - $1,750 = $750
Annual Cash Flow = $750 × 12 = $9,000
This property has a positive cash flow of $750 per month, which is $9,000 per year after all expenses.
Interpreting Results
Your cash flow results can help you make informed decisions about your rental property investment:
- Positive Cash Flow: Your rental income covers all expenses. This is ideal for long-term investment.
- Break-Even Cash Flow: Your income equals your expenses. You're covering costs but not making a profit.
- Negative Cash Flow: Your expenses exceed your income. You need to either increase rental income or reduce expenses.
Remember that cash flow is different from ROI (Return on Investment). While positive cash flow is good, you should also consider other factors like property appreciation and tax benefits.