Rental Cash Flow Calculator
What the property actually pays you each month — with the reserves most spreadsheets quietly leave at zero.
Purchase
Financing
Income
Fixed expenses
Assumptions
Reserves you do not spend every month are still costs. Drag them to zero to see what the optimistic version of this deal looks like.
Appreciation starts at 0% on purpose. It is a forecast, not a return you have earned.
Monthly cash flow
—
Select a payment structure to compute.
Operating statement
| Gross scheduled income | — |
|---|---|
| Less vacancy | — |
| Effective gross income | — |
| Operating expenses | — |
| Net operating income | — |
| Annual debt service | —Select a payment structure |
| Annual cash flow | —Select a payment structure |
| Cash invested | — |
| Cash-on-cash return | —Select a payment structure |
| Cap rate | — |
| DSCR | — |
| Year-one principal paydown | — |
| Year-one appreciation | — |
| Total first-year return | —Select a payment structure |
| Expense ratio | — |
| Break-even occupancy | —Select a payment structure |
| Rent to price | — |
Estimates only, based on the assumptions shown above. Actual returns depend on real vacancy, real repair costs, real rent growth, financing terms at close, and taxes — none of which this tool can know. Not a loan commitment, an offer of credit, or investment advice.
Cash flow is easy to calculate and easy to overstate
Rent minus the mortgage is not cash flow. It is the number that makes every deal look like it works, and it is why so many first rentals turn out to be break-even at best once a full year has actually gone by.
Real cash flow subtracts everything the property costs, including the costs that do not arrive as a monthly bill. Four of those are percentages rather than invoices, and they are the four that get set to zero:
- Vacancy. No property is occupied every month forever. One turnover a year on a $2,200 rental — a few weeks empty plus make- ready — is roughly 5 percent of gross rent gone.
- Maintenance. The running repairs: the tap, the appliance, the service call, the tenant who locked themselves out.
- CapEx. The replacements. A roof is 20 to 25 years, an HVAC system 15, a water heater 10, flooring 7 to 10. You are not paying for any of them this month, and you are paying for all of them eventually. Reserving nothing does not make them cheaper; it just moves the cost to a year you did not plan for.
- Management. Eight to ten percent of collected rent if someone else runs it. If you run it yourself you are not saving that money, you are earning it — and if you ever stop, the deal has to still work.
Together those are usually 20 to 25 percent of gross rent. On the default scenario above they turn a comfortable-looking spread into about $37 a month. That is not a broken deal, but it is a very different deal from the one rent-minus-mortgage describes.
The other number worth reading here is break-even occupancy. It answers the question cash flow does not: how much can go wrong before this costs you money? A property breaking even at 93 percent occupancy has roughly three and a half weeks of slack across a whole year. One breaking even at 78 percent can absorb a bad tenant and a failed furnace in the same quarter and still be fine. Two deals with identical cash flow can be completely different risks.
A last note on honesty with yourself: every slider on this page can be dragged to zero, and the deal will look considerably better when you do it. That is the point of leaving them visible and adjustable rather than burying them. If a property only works with no vacancy, no repairs, no reserves and no management, it does not work — you have just moved the loss somewhere you cannot see it.
Methodology
- Gross scheduled income = (rent + other income) × 12.
- Effective gross income = gross scheduled income less vacancy.
- Operating expenses = taxes + insurance + HOA + utilities + other + maintenance + CapEx + management. Debt service is excluded by definition — it is financing, not an operating cost.
- Net operating income = effective gross income less operating expenses.
- Cash flow = net operating income less annual debt service.
- Break-even occupancy = (operating expenses + debt service) ÷ gross scheduled income.
Maintenance and CapEx are reserved against gross scheduled income; management is charged on collected income, which is how managers actually bill. Principal and interest is computed from the loan terms, so taxes and insurance are never double-counted against an escrowed payment.
Deliberately excluded: income tax, depreciation, rent growth, and expense inflation. Depreciation in particular is a real economic benefit, but its value depends entirely on your tax position, and that is a conversation for your accountant rather than a number this page should invent.
Frequently asked questions
- What expenses should a rental cash flow calculation include?
- Everything the property costs whether or not you write a cheque this month. Taxes, insurance, HOA, any utilities you pay, and the loan payment are the obvious ones. The four that get left out are vacancy, maintenance, capital expenditure reserves and management — and those four are usually 20 to 25 percent of gross rent combined. A calculation without them is not a cash flow figure, it is a best case.
- What is the difference between maintenance and CapEx?
- Maintenance is what keeps the property running: a leaking tap, a failed appliance, a service call. CapEx is replacing the things that eventually die — roof, HVAC, water heater, flooring, exterior paint. Maintenance shows up monthly and CapEx shows up as a single five-figure bill in year seven. Folding them into one percentage is the most common reason a pro forma beats reality, which is why they are separate lines here.
- Is negative cash flow always a bad deal?
- Not automatically. A property can lose money monthly and still be a reasonable buy if principal paydown and appreciation carry it, or if you are buying below market and forcing value. What is not reasonable is discovering the deficit after closing. If you go in knowing you are funding $200 a month for three years, that is a decision. If you thought it cash flowed, that is a mistake.
- What is break-even occupancy?
- The occupancy rate at which rent exactly covers operating expenses and the loan payment. Below it you are funding the property from savings. It is the most useful single stress test on this page: a deal that breaks even at 93 percent occupancy has almost no room for a slow month, while one that breaks even at 78 percent can absorb a vacancy and a repair in the same quarter.
- Should I include my mortgage payment or just principal and interest?
- Principal and interest only, because taxes and insurance are already counted as their own expense lines. Adding a full escrowed payment on top of separate tax and insurance lines double-counts them and understates cash flow. This calculator asks for taxes and insurance separately and computes principal and interest from the loan terms for exactly that reason.
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