Free rental planning tool
Rental cash flow calculator
Estimate monthly cash flow after vacancy, operating expenses, mortgage payments, and a capital reserve.
How this calculation works
Effective income subtracts the vacancy allowance from scheduled rent, then adds other income. NOI subtracts operating expenses. Cash flow also subtracts debt payments and capital reserves. Include taxes, insurance, management, utilities you pay, and routine repairs in operating expenses; avoid counting the mortgage twice.
Assumptions to review
This scenario assumes steady inputs. Cash flow is not taxable income. Capital reserves are budget allowances, not automatic tax deductions.
Prepare and read a cash-flow scenario
Put recurring amounts on the same monthly basis. Divide annual property taxes, insurance and other annual operating bills by 12 before adding them to monthly operating expenses. Include management, landlord-paid utilities and routine repairs. Enter the mortgage payment and capital reserve in their separate fields. If a mortgage payment includes escrow for taxes or insurance, separate those amounts so they are counted once.
Follow the money through the result. With $2,000 scheduled rent, a 5% vacancy allowance and no other income, effective monthly income is $1,900. Subtracting $600 operating expenses leaves $1,300 before debt. A $900 mortgage payment and $100 reserve leave $300 monthly cash flow, or $3,600 annually, under those assumptions. An allowance spreads costs over time; actual receipts and repair bills can arrive unevenly.
Read each ratio for its own purpose. Gross yield uses scheduled rent and purchase price; net operating yield uses income after operating costs, before debt and reserves. Cash-on-cash return uses the cash-flow result and the cash invested you enter. Include the acquisition cash relevant to your scenario consistently. The displayed debt coverage ratio uses this tool's NOI and mortgage inputs; a lender may calculate qualifying cash flow and debt differently.
Test a difficult month as well. Try lower rent, more vacancy and higher operating costs. Keep acquisition funding, major work, taxes and sale assumptions under separate review. A positive estimate does not establish investment suitability or loan eligibility.