Rental Property Cash Flow Calculator
Calculate monthly and annual cash flow for a rental property after all expenses including PITI, vacancy reserve, maintenance, and property management fees.
Results
Visualization
How It Works
Cash flow is the money left over after ALL expenses are paid, including mortgage, taxes, insurance, vacancy reserves, maintenance reserves, and property management. Positive cash flow means the property pays for itself and puts money in your pocket each month. A thorough cash flow analysis accounts for reserves that do not hit your bank account monthly but will be needed over time.
The Formula
Variables
- PITI — Principal, Interest, Taxes, and Insurance — the core monthly payment
- Vacancy Reserve — Percentage set aside for expected vacancy (typically 5-8%)
- Maintenance Reserve — Percentage set aside for repairs and upkeep (typically 5-10%)
- Management Fee — Property management company fee (typically 8-12% of gross rent)
- Expense Ratio — Total expenses as a percentage of gross income — lower is better
Worked Example
$2,200 rent + $100 other income = $2,300 gross. PITI = $1,570. Vacancy (5%) = $115. Maintenance (8%) = $184. Management (10%) = $230. HOA = $0. Total expenses = $2,099. Monthly cash flow = $201. Annual = $2,412. Expense ratio = 91.3%.
Practical Tips
- The 50% rule says operating expenses (excluding mortgage) typically equal 50% of gross rent. Use this as a quick sanity check.
- Always include vacancy and maintenance reserves even if the property is currently occupied and in good shape. These expenses WILL occur.
- A cash-flow-positive property can still be a bad investment if the cash-on-cash return is too low. Compare against alternative investments.
- Self-managing saves the 8-12% management fee but costs your time. Value your time realistically.
- Increasing rent by $100/month adds $1,200/year directly to cash flow. Small improvements that justify higher rent can have outsized ROI.
Frequently Asked Questions
What is a good monthly cash flow per rental unit?
Many investors target $100-300 per unit per month after all expenses and reserves. In expensive markets, break-even or slightly positive may be acceptable if appreciation is strong. In cash-flow markets (Midwest, Southeast), $200-500+ per unit is achievable.
What is the 1% rule?
Monthly rent should be at least 1% of the purchase price. A $200,000 property should rent for $2,000+/month. Properties meeting the 1% rule are more likely to cash flow positively. In expensive markets, 0.6-0.8% is more realistic.
Should I include principal paydown as income?
No. Principal paydown builds equity but is not cash flow. Cash flow is actual money in your pocket each month. Equity is only realized when you sell or refinance.
Why include reserves if I have savings?
Reserves ensure the property is self-sustaining. If you subsidize maintenance from personal savings, the property is not truly cash-flow positive. Professional investors always account for reserves in their analysis.
How does vacancy affect cash flow?
A 5% vacancy reserve on $2,200/month rent sets aside $110/month ($1,320/year) for expected vacancies. This is roughly equivalent to 2-3 weeks of vacancy per year, which is the national average.