The short answer
For a stated period, subtract cash operating outflows, debt payments and capital spending from cash rental receipts. Keep reserve contributions visible and distinguish actual cash flow from a forecast or taxable profit.
On this page
Define the boundary
Use completed receipts rather than scheduled rent. Exclude owner contributions and loan proceeds from operating performance. State whether your reported result is before or after capital spending and reserve allocations.
Avoid counting costs twice
A mortgage payment can include principal, interest and escrow. If you subtract that payment and separately subtract the same escrow-funded taxes and insurance, your cash forecast understates the result.
Worked example
Collected rent of $2,000 less $650 operating costs and $900 debt service leaves $450 before capital spending and reserves. Allocating $200 to reserves leaves $250 available under that planning convention. A vacant month changes the result immediately.
References and next steps
Use these references for the specific topic they cover. Local requirements and individual circumstances may differ.
Written and maintained by the Rentari team. Examples explain a decision; they are not customer results. This is general education. Confirm the rules and treatment for your property with a qualified local professional. Found an error or an unclear step? Send a correction with this page's address and the detail to review.
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