Rental Property Cash Flow Calculator
Follow every dollar of rent down to what you actually keep, then check your budget against the investor’s 50% rule.
Your expense ratio is in the typical 35–55% range.
Cash flow, line by line
Rental cash flow is simple arithmetic; the trap is what gets left out. Listing sheets often show rent minus mortgage, taxes and insurance and call the rest profit. Over a decade a single-family rental will need a roof, a water heater, flooring and appliances, and it will sit empty between tenants. That’s why this ledger reserves a percentage of rent for repairs, capital expenditures and management even if you plan to do the work yourself — your time has a price and you may not always want to spend it.
The 50% rule, and when to ignore it
The 50% rule says operating expenses tend to consume about half of gross rent. It’s a useful first filter: if half the rent doesn’t cover the mortgage, the deal rarely survives a detailed budget. It overstates costs on newer homes with tenant-paid utilities and understates them on older buildings where the owner pays water, trash and heat. Once a listing passes the screen, replace the rule with real figures like the ones above.
Next step: take these numbers to the full rental property calculator for a 30-year projection, or check whether a lender will finance it with the DSCR calculator.
Questions investors ask
How do you calculate cash flow on a rental property?
Monthly cash flow = rent + other income − vacancy − operating expenses − mortgage payment. Operating expenses include property tax, insurance, HOA, repairs, capital reserves, management and any utilities you pay. What remains is the pre-tax cash you keep.
What is good cash flow for a rental property?
Many investors look for at least $100–$300 per door per month after setting aside realistic reserves. The number matters less than the margin: cash flow that is at least 10–15% of rent can survive a vacancy or a surprise repair without you feeding the property.
What is the 50% rule in real estate?
The 50% rule is a quick screen that assumes operating expenses (everything except the mortgage) will average about half of gross rent over time. Take half the rent, subtract the mortgage payment, and what is left is a rough cash-flow estimate. It is a filter for listings, not a substitute for a line-by-line budget.
Why is my cash flow negative?
Usually because the price is high relative to rent, the interest rate is high, or the budget includes proper reserves that listing sheets leave out. Check the break-even rent figure: it tells you exactly what rent the property needs to break even at your financing.