Rental Cash Flow Calculator
This simple calculator helps you determine the monthly cash flow for a rental property based on your total monthly income and total monthly expenses.
Enter the total expected monthly rental income and the total expected monthly expenses to see your projected cash flow.
Enter Monthly Financials
Understanding Rental Cash Flow
What is Rental Cash Flow?
Rental cash flow is the amount of money left over after collecting rental income and paying all operating expenses for a property over a specific period, typically a month.
It's a simple calculation:
Monthly Cash Flow = Total Monthly Rental Income - Total Monthly Expenses
Cash flow can be:
- Positive: Income > Expenses (The property generates profit)
- Negative: Income < Expenses (The property costs you money each month)
- Break-Even: Income = Expenses (The property covers its costs but doesn't generate profit)
Positive cash flow is generally the goal for investors, providing passive income and contributing to overall financial health.
What's Included in "Total Monthly Expenses"?
For this basic calculator, "Total Monthly Expenses" is a single input. In reality, this should include ALL recurring monthly costs, such as:
- Mortgage Payment (Principal & Interest)
- Property Taxes (divide annual total by 12)
- Landlord Insurance (divide annual total by 12)
- Property Management Fees (if applicable)
- HOA Fees (if applicable)
- Estimated Maintenance/Repair Costs (put aside a percentage of rent monthly)
- Estimated Vacancy Costs (account for months the property might be empty)
- Utilities paid by the landlord (if any)
Note: This calculator is basic. For real-world investing, you must accurately estimate ALL potential income and expenses, including non-monthly costs like repairs and vacancy.
Rental Cash Flow Examples
See how different scenarios impact cash flow. Click to reveal the calculation.
Example 1: Standard Positive Cash Flow
Scenario: A property with typical income and expenses resulting in profit.
1. Known Values: Monthly Rental Income = $1,800, Total Monthly Expenses = $1,400.
2. Calculation: Cash Flow = $1,800 - $1,400
3. Result: Cash Flow = $400
Conclusion: The property generates a positive cash flow of $400 per month.
Example 2: Negative Cash Flow
Scenario: Expenses exceed income, resulting in a monthly loss.
1. Known Values: Monthly Rental Income = $1,500, Total Monthly Expenses = $1,650.
2. Calculation: Cash Flow = $1,500 - $1,650
3. Result: Cash Flow = -$150
Conclusion: The property has a negative cash flow of $150 per month, costing the owner money.
Example 3: Break-Even Cash Flow
Scenario: Income perfectly matches expenses.
1. Known Values: Monthly Rental Income = $2,000, Total Monthly Expenses = $2,000.
2. Calculation: Cash Flow = $2,000 - $2,000
3. Result: Cash Flow = $0
Conclusion: The property breaks even each month, covering costs but yielding no profit.
Example 4: High Income, Higher Expenses (Still Positive)
Scenario: A more expensive property with higher rent and costs.
1. Known Values: Monthly Rental Income = $3,500, Total Monthly Expenses = $3,100.
2. Calculation: Cash Flow = $3,500 - $3,100
3. Result: Cash Flow = $400
Conclusion: Despite higher numbers, the cash flow is the same as Example 1.
Example 5: Low Income, Low Expenses (Positive)
Scenario: A more affordable property with lower rent and costs.
1. Known Values: Monthly Rental Income = $900, Total Monthly Expenses = $750.
2. Calculation: Cash Flow = $900 - $750
3. Result: Cash Flow = $150
Conclusion: Even with lower figures, the property generates a positive cash flow.
Example 6: Borderline Positive Cash Flow
Scenario: Income is only slightly more than expenses.
1. Known Values: Monthly Rental Income = $1,600, Total Monthly Expenses = $1,580.
2. Calculation: Cash Flow = $1,600 - $1,580
3. Result: Cash Flow = $20
Conclusion: The property is barely cash flow positive. Small unexpected expenses could easily make it negative.
Example 7: Negative Due to High Expenses
Scenario: Average income but unexpectedly high expenses.
1. Known Values: Monthly Rental Income = $1,700, Total Monthly Expenses = $1,900.
2. Calculation: Cash Flow = $1,700 - $1,900
3. Result: Cash Flow = -$200
Conclusion: High expenses, perhaps from a large repair fund allocation, result in negative cash flow for the month.
Example 8: Impact of Rent Increase
Scenario: Property was break-even (Example 3), then rent increased by $100.
1. Known Values: Monthly Rental Income = $2,100, Total Monthly Expenses = $2,000.
2. Calculation: Cash Flow = $2,100 - $2,000
3. Result: Cash Flow = $100
Conclusion: A $100 rent increase turned break-even into positive cash flow.
Example 9: Impact of Expense Reduction
Scenario: Property had negative cash flow (Example 2), then expenses were reduced by $150.
1. Known Values: Monthly Rental Income = $1,500, Total Monthly Expenses = $1,500.
2. Calculation: Cash Flow = $1,500 - $1,500
3. Result: Cash Flow = $0
Conclusion: Reducing expenses brought the property to break-even cash flow.
Example 10: Property Management Included
Scenario: Calculating cash flow with a property management fee included in expenses.
1. Known Values: Monthly Rental Income = $2,200, Total Monthly Expenses = $1,950 (includes mortgage, taxes, insurance, plus $250 management fee).
2. Calculation: Cash Flow = $2,200 - $1,950
3. Result: Cash Flow = $250
Conclusion: Even with a management fee, the property has positive cash flow.
Frequently Asked Questions about Rental Cash Flow
1. What is rental cash flow?
It's the net income from a rental property after collecting rent and paying all operating expenses for a given period, usually monthly.
2. How do I calculate basic monthly cash flow?
Subtract your total monthly expenses (mortgage, taxes, insurance, management, etc.) from your total monthly rental income.
3. Is positive cash flow always good?
Generally yes, as it means the property is generating income beyond its costs. However, it's crucial that your "Total Monthly Expenses" accurately reflect *all* potential costs, including estimates for repairs and vacancy.
4. What does negative cash flow mean?
Negative cash flow means the property is costing you money each month. You have to contribute funds to cover the expenses that exceed the rental income.
5. What should be included in total monthly expenses?
Common expenses include mortgage payments, property taxes, insurance, HOA fees, property management fees, and allocating funds for future repairs and potential vacancy.
6. Does this calculator account for vacancy?
No, this basic calculator uses a single input for "Total Monthly Expenses". To account for vacancy, you would need to estimate a monthly cost for potential empty periods and include it in your "Total Monthly Expenses" figure.
7. Does this calculator include capital expenditures (CapEx)?
No, major renovations or significant upgrades (CapEx) are typically treated separately from regular operating expenses. However, savvy investors often set aside a monthly amount for future CapEx in their overall financial planning.
8. How can I improve a property's cash flow?
You can improve cash flow primarily by increasing rental income (where possible and market-appropriate) or by decreasing expenses (e.g., refinancing mortgage, finding cheaper insurance, performing maintenance proactively to prevent costly repairs).
9. How often should I check cash flow?
It's best practice to calculate and track your rental property's cash flow monthly to monitor its performance closely.
10. Is cash flow the only metric for rental property investment?
No. While important, cash flow is just one metric. Investors also consider factors like property appreciation, principal reduction on the mortgage, and tax benefits when evaluating an investment property's overall profitability.
