How to Calculate Rental Cash Flow

Nearly every rental investor agrees that net cash flow is the pulse of your property’s financial health. In a simple example, if you collect $5,500 in rent and other income, then pay $1,850 for mortgage, upkeep, and fees, you end up with $3,650 in monthly cash flow (Rentastic). That leftover covers surprises, funds improvements, and builds your wealth over time.

In this ultimate guide, you’ll learn exactly how to calculate rental property cash flow, step by step. You’ll see which numbers to track, how to adjust for real-world factors, and ways to forecast future performance. By the end, you’ll feel confident using calculate rental property cash flow as a tool for smarter decisions. Good news, once you have the right figures, the math is straightforward.

Key idea
By mastering a clear, step-by-step formula, you can monitor your investment’s health and make data-driven choices.

Understanding cash flow basics

When you hear cash flow, think of money moving in and out of your bank account. Tracking those flows shows whether a property truly earns or drains cash. Here are the core concepts.

What is net cash flow?

Net cash flow equals total cash inflows minus total cash outflows.  

• Inflows: rent, fees, reimbursements.  
• Outflows: mortgage payments, maintenance, taxes, insurance, utilities, management fees.

A positive number means extra cash each period. A negative result signals you’re subsidizing the property.

Why net cash flow matters

A 2022 Rentastic report notes that investors who check cash flow monthly avoid surprises and stay ready for opportunities. With clear cash figures you can:  

• Cover unexpected repairs without loans  
• Plan renovations or new purchases  
• Compare properties on an apples-to-apples basis  

Quick view of cash flow categories

Good news, you’ll focus mostly on operating flows to start.  

Gather essential cash details

Before you run any numbers, collect accurate data for one period (usually a month). You need both inflows and outflows.

Track all rental income

• Base rent from tenants  
• Late fees, pet fees, parking fees  
• Laundry or storage income  

Account for vacancy and credit loss

• Estimate vacancy rate (5% is common).  
• Multiply expected rent by vacancy rate to find losses.

List operating expenses

• Mortgage principal and interest  
• Property taxes and insurance  
• Maintenance and repairs  
• Utilities (if you cover any)  
• Property management fees  
• HOA or condo fees  

Factor in capital expenditures

• Roof replacement  
• HVAC upgrades  
• Major appliance swaps  

Good news, once you know what to track, you’ll breeze through the calculation. At this point you’re ready to calculate rental property cash flow with confidence.

Walk through calculation steps

Here’s the basic formula, broken into three steps.

1. Calculate total cash inflows

Add up all rent and other income for the period.
Example:  

• Rent: $5,000  
• Parking fees: $300  
• Laundry: $200
  Total inflows: $5,500

2. Calculate total cash outflows

Sum all expenses you paid in the same period.
Example:  

• Mortgage payment: $1,200  
• Taxes and insurance: $400  
• Maintenance: $150  
• Utilities: $100
  Total outflows: $1,850

3. Subtract outflows from inflows

Net cash flow = Inflows − Outflows
Using our numbers, net cash flow = $5,500 − $1,850 = $3,650