1. What is Cash Flow in Rental Properties?

Cash flow is the net amount of cash being transferred into and out of a rental property. Positive cash flow indicates the property is generating more income than expenses, while negative cash flow means expenses exceed income.

2. How Does the Calculator Work?

The calculator uses the simple cash flow formula:

Where:

• \( \text{Rental Income} \) — Total income from rent and other property-related income sources
• \( \text{Expenses} \) — All property-related expenses including mortgage, taxes, maintenance, etc.

Explanation: This fundamental calculation helps property owners understand their property's financial performance.

3. Importance of Cash Flow Calculation

Details: Calculating cash flow is essential for assessing investment performance, making financing decisions, and planning for property improvements or expansions.

4. Using the Calculator

Tips: Enter rental income and expenses in dollars. Both values must be positive numbers. The calculator will compute the difference between income and expenses.

5. Frequently Asked Questions (FAQ)

Q1: What counts as rental income?
A: Includes monthly rent payments, parking fees, laundry income, and any other income generated by the property.

Q2: What expenses should be included?
A: Mortgage payments, property taxes, insurance, maintenance, repairs, utilities, property management fees, and vacancy reserves.

Q3: What is considered good cash flow?
A: Generally, $100-$200 per door per month is considered good, but this varies by market and property type.

Q4: Should I include principal payments in expenses?
A: For cash flow calculations, include the entire mortgage payment (principal + interest) as an expense.

Q5: How often should I calculate cash flow?
A: Monthly calculations are recommended, with annual reviews to assess overall performance.