What is rental property cash flow?
Rental property cash flow is the money left after rental income, other income, vacancy, operating expenses, and debt service are considered.
Formula
Monthly Cash Flow = Effective Rental Income - Itemized Operating Expenses - Debt Service
Cash flow example
If effective monthly income is $2,350, itemized operating expenses are $1,050, and debt service is $1,200, estimated monthly cash flow is $100.
How It Works
- Scheduled rent and other income are reduced by a vacancy allowance.
- Annual operating expense line items are converted to monthly amounts, and property management fees are calculated from effective monthly income.
- Debt service is subtracted last to estimate cash flow after financing.
Why It Is Important
- Cash flow shows whether a rental property is producing spendable money after recurring costs.
- Expense tracking quality directly affects whether the number is useful.
- PropioLedger separates property expenses from rental ledger balances so cashflow reporting stays clean.
Important Limits
This calculator is for planning and education. It does not replace accounting, tax, lending, legal, appraisal, or investment advice. Actual performance depends on rent collection, lease terms, repairs, vacancy, financing, taxes, insurance, local market conditions, and the quality of your source records.