Rental Property Cash Flow Calculator: Does This Deal Pay You Every Month?
A rental property cash flow calculator answers one plain question before you sign anything: after the mortgage, the taxes, the repairs, and the months with no tenant, does money stay in your pocket each month, or do you end up topping the property up from your own pay?
Think of a rental as a small business with one customer at a time. Rent comes in. Costs go out. The loan takes its cut every month without fail.
Cash flow, in plain English
Cash flow is what is left after every bill tied to the property is paid. Start with rent, subtract empty months and operating costs, then subtract the mortgage. Positive means the tenant pays you. Negative means you pay, out of your own pocket, for someone else's housing.
Don't confuse cash flow with net operating income, or NOI. NOI is rent minus operating costs, before the mortgage, so it judges the property itself. Cash flow is NOI minus the mortgage, so it judges the deal as you financed it. That's why two buyers can look at one listing and reach opposite conclusions.
Every input, explained
Purchase price. What you pay, before closing costs.
Down payment (%). Your cash share of the price.
Closing costs. One-time purchase fees, such as lender and title charges.
Loan rate (%/yr). The annual mortgage rate. Get a real quote if you can.
Loan term (years). Years to repay the loan, usually 30 for rentals.
Rent. Monthly rent when occupied. Use comparable homes that actually leased.
Other income. Parking, laundry, or pet fees. Keep it modest without proof.
Vacancy rate (%). Rent lost to empty months. At 5%, you lose about three weeks a year.
Property tax. Your monthly share of the annual tax bill. Check the county record.
Insurance. Monthly landlord insurance, which covers rental use and liability.
Maintenance. A monthly repair allowance. Even in a quiet year, something breaks.
HOA fees. Monthly dues in a managed community. Check rental rules before you buy.
Management (% of rent). The manager's cut, usually 8 to 10% of effective rent, the rent left after vacancy.
Other expenses. Lawn care, pest control, or utilities you cover.
A worked example: a $200,000 house rented for $1,800
Buy for $200,000 with 20% down ($40,000), plus $5,000 closing costs, so cash invested is $45,000. The $160,000 loan runs 30 years at 6.5%. Rent is $1,800, vacancy 5%, tax $250, insurance $120, maintenance $150, HOA $0, management 8% of rent, other expenses $50, all monthly.
- Mortgage payment. Monthly rate is 6.5% divided by 12, or 0.005417, over 360 payments. The standard amortization formula gives $1,011.31 a month.
- Effective rent. 5% of $1,800 is $90.00, so effective rent is $1,710.00 a month, with no other income.
- Operating costs. Management at 8% of $1,710.00 is $136.80. Add tax of $250, insurance of $120, maintenance of $150, HOA fees of $0, and other expenses of $50, for $706.80 a month.
- NOI. $1,710.00 minus $706.80 is $1,003.20 a month, or $12,038.40 a year. This is the property's earning power before debt.
- Cash flow. $1,003.20 minus $1,011.31 is -$8.11 a month, or -$97.31 a year. Yes, negative. This deal does not quite pay for itself at $1,800 rent, and that is exactly the kind of near miss a calculator exists to catch.
- Returns. Cash-on-cash is -$97.31 divided by $45,000, which is -0.22%. Cap rate is $12,038.40 divided by $200,000, which is 6.02%. Gross rent multiplier is $200,000 divided by $21,600, which is 9.26.
- The 1% rule. One percent of $200,000 is $2,000, and $1,800 rent falls short, so this deal fails the 1% rule. That alone won't kill a deal, but it warns you that you are betting on rent or price growth.
Rent sensitivity is stark. At $1,600, the deal loses $182.91 a month. At $1,800, it loses $8.11. At $2,000, it earns $166.69 a month, for $2,000.29 a year and a 4.45% cash-on-cash return. A $200 rent swing flips this property from a drain to a payer, so verify rent with real comparable leases before haggling over $2,000 on price.
| Monthly rent | Monthly NOI | Monthly cash flow | Cap rate | Cash-on-cash |
|---|---|---|---|---|
| $1,600 | $828.40 | -$182.91 | 4.97% | -4.88% |
| $1,800 | $1,003.20 | -$8.11 | 6.02% | -0.22% |
| $2,000 | $1,178.00 | $166.69 | 7.07% | 4.45% |
The table holds the mortgage at $1,011.31 and cash invested at $45,000, so only rent, vacancy, and management move. Cap rate rises with rent while the mortgage stays put, so the owner keeps the difference.
Reading the outputs like a buyer
Monthly cash flow is the headline, because it decides whether you feed the property or it feeds you. Cap rate lets you compare properties across prices, since it ignores your loan: a 6.02% cap rate here can sit beside a 6.02% cap rate on a duplex at twice the price, and the comparison is fair. Cash-on-cash is personal, since it measures your own cash.
Gross rent multiplier, price divided by yearly gross rent, is the quickest screen. Our example gives 9.26 at $1,800 rent, 10.42 at $1,600, and 8.33 at $2,000. It ignores costs, so use it to sort listings, never to approve one. The 1% rule works the same way: rent at or above 1% of price is a promising sign, below it is a prompt to look harder.
Common mistakes
- Assuming zero vacancy. Tenants move and repairs take weeks. Budget 5% from day one.
- Forgetting maintenance reserves. A roof, a furnace, and a water heater all have expiry dates.
- Trusting the seller's rent figure. Sellers quote the highest rent the market might bear. Verify with recent leases nearby.
- Judging by cash flow alone. A property can cash flow nicely in a declining area, while a tight deal in a growing area builds wealth through equity and rent growth.
- Ignoring your own time. Self-managing to save the 8% fee still costs you evenings and weekends. Price that time honestly.
Practical tips
Run every deal three ways before you offer: at the rent you hope for, at the rent comparable homes actually get, and at rent 10% below that. If the deal only works in the hopeful case, walk away or offer less, because hope isn't a tenant. Keep a reserve fund equal to at least three months of mortgage and costs, so a vacancy or a broken furnace is an inconvenience rather than a crisis. And re-run the numbers each year with real tax bills, real insurance renewals, and real rents. Don't let stale figures decide a live deal.
Frequently asked questions
What monthly cash flow should a rental property aim for?
Many buyers look for $100 to $200 a month per unit after all costs. Our example at $1,800 rent gives -$8.11, which misses that bar, while $2,000 rent gives $166.69, which clears it.
Why is cash-on-cash return negative when the cap rate is positive?
Cap rate ignores the mortgage and cash-on-cash does not. This property earns 6.02% before debt, but the $1,011.31 mortgage beats the $1,003.20 NOI, so the owner's cash loses 0.22% a year.
Does passing the 1% rule mean a rental is a good deal?
No, it only means rent clears a rough first screen. A property can pass it and still lose money once taxes, insurance, HOA fees, and management are counted, so run the full calculation before deciding.
Should I include vacancy if I already have a tenant lined up?
Yes. A tenant today isn't a tenant forever, and turnover gaps and repairs between tenants are part of rental life. A 5% allowance protects your forecast from the first empty month.
Is a negative cash flow rental ever worth buying?
Sometimes, if you are buying for rent growth or a renovation that lifts rent, and you can cover the shortfall from other income. Don't buy one by accident, though. Buy it knowing the monthly cost and when it should turn positive.
Related calculators: Mortgage Calculator, House Affordability Calculator, and ROI Calculator.
A rental only earns its keep when the tenant's rent covers the loan, the taxes, and the repair bill with something left over. Run the numbers cold, verify the rent, leave room for empty months, and let a failing deal wait for a lower price or higher rent.
Disclaimer: this guide explains rental math for education only and is not financial, tax, or legal advice. Rents, taxes, insurance rates, and loan terms vary by property and location, so confirm the figures for your own deal with a lender, a tax professional, and local market data before you buy.
Further reading: the U.S. Department of Housing and Urban Development offers free housing counseling contacts and plain-language landlord and tenant resources at hud.gov, a useful starting point before you sign a lease or a purchase agreement.