1. What is Monthly Cash Flow?

Monthly Cash Flow represents the net income generated from a rental property after deducting all expenses and mortgage payments. It's a key metric for evaluating the profitability of real estate investments.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( \text{Rent} \) — Monthly rental income ($)
• \( \text{Expenses} \) — Monthly operating expenses ($)
• \( \text{Mortgage} \) — Monthly mortgage payment ($)

Explanation: This calculation provides a clear picture of the actual cash generated by the rental property each month after accounting for all costs.

3. Importance of Cash Flow Calculation

Details: Positive cash flow indicates a profitable investment that generates income, while negative cash flow means the property is costing money each month. This metric is crucial for investment decision-making and financial planning.

4. Using the Calculator

Tips: Enter monthly rent amount, total monthly expenses (including maintenance, taxes, insurance, etc.), and monthly mortgage payment. All values must be non-negative numbers.

5. Frequently Asked Questions (FAQ)

Q1: What expenses should be included?
A: Include property taxes, insurance, maintenance costs, repairs, property management fees, utilities (if paid by owner), and vacancy reserves.

Q2: What is considered good cash flow?
A: Generally, $100-200 per door is considered good cash flow, though this varies by market and property type.

Q3: Should I include principal payments in expenses?
A: The entire mortgage payment (principal + interest) should be included in the calculation as it represents cash outflow.

Q4: How does cash flow differ from profit?
A: Cash flow measures actual money in/out each month, while profit includes non-cash items like depreciation and may differ from cash flow.

Q5: What if I have multiple rental properties?
A: Calculate cash flow for each property separately, then sum them for total portfolio cash flow.