Rental Property Cash Flow Calculator
Calculate monthly net cash flow, capitalization rate (cap rate), cash-on-cash return, and break-even occupancy for your residential investment properties.
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Accurately forecasting net rental cash flow is the difference between a high-performing real estate investment and a financial liability. Many new investors calculate cash flow by simply subtracting the mortgage payment from the monthly rent, completely ignoring vacancies, property management fees, insurance, and maintenance reserves.
The Complete Cash Flow Waterfall
To determine true net cash flow, real estate investors follow a standard financial waterfall:
- Gross Scheduled Rent (GSR): The total annual rent if all units are occupied 100% of the year.
- Effective Gross Income (EGI): Gross scheduled rent minus a realistic vacancy allowance (typically 5% to 8%).
- Operating Expenses (Opex): Real estate property taxes, hazard/liability insurance, routine repairs, and property management fees.
- Net Operating Income (NOI): Effective Gross Income minus Operating Expenses.
- Debt Service (P&I): The annual principal and interest paid on your mortgage loan.
- Net Annual Cash Flow: Net Operating Income minus Debt Service.
Using RentLedger’s built-in Deal Analyzer, you can model multi-year scenarios, factor in renovation budgets, and compute your exact break-even occupancy percentage before acquiring a property.
Frequently Asked Questions
What is the difference between Net Operating Income (NOI) and Cash Flow?
NOI represents property revenues minus operating expenses (taxes, insurance, maintenance), but excludes mortgage debt service. Cash Flow is the net money remaining after paying both operating expenses and mortgage principal and interest.
What is a good Cash-on-Cash return for a residential rental property?
Most residential real estate investors target a Cash-on-Cash return of between 8% and 12%, though high-appreciation coastal markets may see acceptable returns in the 5% to 7% range.