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Rental Cash Flow Calculator

Enter monthly rent, operating expenses, and mortgage payment to find the cash flow.

How it is calculated

The tool works in two subtractions, all in monthly amounts: NOI = rent − operating expenses and cash flow = NOI − mortgage payment. The annual figure is the monthly cash flow × 12.

Rent is what you collect each month, operating expenses is everything you pay to keep the property running (management, repairs, insurance, property tax, a vacancy reserve if you use one), and mortgage payment is the loan instalment. The tool does not add a vacancy or maintenance allowance by itself, so if you want one, include it in the expenses. Income tax, depreciation and the down payment are not considered. None of the three amounts may be negative. A negative result means you pay money out of pocket each month; it is shown with a minus sign.

Worked example

A flat rents for $2,200 a month. Operating expenses are $650 and the mortgage instalment is $1,350.

NOI = 2,200 − 650 = $1,550.00. Monthly cash flow = 1,550 − 1,350 = $200.00. Annual cash flow = 200 × 12 = $2,400.00. The property earns a small surplus after financing, even though the NOI looks much larger.

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Common mistakes

  • Putting the mortgage instalment into operating expenses as well. It is subtracted separately, so including it twice makes cash flow too low.
  • Entering annual amounts for expenses (such as a yearly property tax bill) in a monthly field. Divide yearly costs by 12 first.
  • Leaving out vacancy and repairs. Using full rent with no reserve makes cash flow look better than it will be in a year with an empty month.
  • Using a mortgage payment that already includes taxes and insurance while also listing them in expenses.
  • Mistaking NOI for cash flow. NOI is before the loan payment; cash flow is after it.

Sources

About this calculator

Rental cash flow is what is actually left in a landlord's pocket each month after every real expense is paid: monthly rent collected, minus operating expenses (property management, maintenance, insurance, property tax, vacancy allowance), minus the mortgage payment (principal and interest). This differs from net operating income (NOI), which stops before subtracting the mortgage — cash flow is the number that matters once financing is factored in.

Real estate investors use monthly and annualized cash flow as the bottom-line test of whether a rental property is actually profitable to hold, not just on paper but in real money hitting the bank account. A property can look attractive on cap rate or appreciation potential and still have negative cash flow if the mortgage payment outweighs rent minus expenses, which is why this figure is often the deciding factor in a buy or pass decision.

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Comments (1)

  • Editorial team

    A negative monthly cash flow is not automatically a loss in wealth, because the mortgage payment includes principal that you are paying back to yourself as equity. The figure is simply the cash you add or receive. To stress-test it, rerun with eleven months of rent instead of twelve (2,016.67 instead of 2,200) to see how one empty month changes the picture. Which cost do landlords forget most?

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