1. What is Property Cash Flow?

Property cash flow is the net amount of cash generated by a rental property after accounting for all expenses. It's a key metric for evaluating the profitability of real estate investments.

2. How Does the Calculator Work?

The calculator uses the cash flow formula:

Where:

• Rental Income — Total monthly income from tenants
• Operating Expenses — All property-related expenses (taxes, insurance, maintenance, etc.)
• Mortgage Payments — Principal and interest payments on the property loan

Explanation: Positive cash flow indicates the property generates more income than expenses, while negative cash flow means expenses exceed income.

3. Importance of Cash Flow Calculation

Details: Cash flow analysis helps investors determine if a property will be profitable, assess risk, and make informed investment decisions. It's crucial for long-term property sustainability.

4. Using the Calculator

Tips: Enter all values in dollars. Use accurate estimates for expenses to get reliable results. Consider both current and potential future expenses in your calculations.

5. Frequently Asked Questions (FAQ)

Q1: What's considered good cash flow for a rental property?
A: Generally, $100-$200 per door per month is considered good, but this varies by market and property type.

Q2: Should I include vacancy rate in operating expenses?
A: Yes, a typical vacancy rate (5-10%) should be factored into your expense calculations.

Q3: How does cash flow differ from profit?
A: Cash flow measures actual money in/out, while profit includes non-cash items like depreciation.

Q4: What expenses are included in operating expenses?
A: Property taxes, insurance, maintenance, repairs, utilities, property management, and vacancy allowance.

Q5: How can I improve my property's cash flow?
A: Increase rent (if market allows), reduce expenses, refinance to lower payments, or add value to justify higher rents.