Skip to main content
KeyRingAll calculators

Rental cash flow calculator

Work out what a rental property puts in your pocket each month. Enter the rent, vacancy, each operating expense and the mortgage payment, and see monthly and annual cash flow, cash flow per unit and the rent you need to break even.

Parking, storage, laundry or pet rent.

The share of the year you expect units to sit empty.

Your annual tax bill divided by 12.

A share of the rent collected. Enter 0 if you manage it yourself.

Routine repairs plus savings for roofs, appliances and other big replacements.

Principal and interest. Enter 0 if you own it free and clear.

Your results

Estimate

Monthly cash flow: $305.00

Annual cash flow
$3,660.00
Cash flow per unit (monthly)
$152.50
Net operating income (monthly)
$1,821.00
Operating expenses (monthly)
$1,269.00
Break-even rent
$2,843.27
Operating expense ratio
41.07%

Results are estimates for planning only. They are not legal, tax or investment advice, and they apply no state or local rules. Check your lease, your local laws and a qualified professional before you rely on a number.

How rental cash flow is calculated

Monthly cash flow = (rent after vacancy + other income) - operating expenses - mortgage payment

Rent after vacancy is the monthly rent minus the vacancy rate. Other income, such as parking or storage, is added on top.

Operating expenses are property taxes, insurance, the management fee, repairs and reserves, and utilities, HOA dues and anything else you pay to run the property. The management fee is a percentage of the rent you actually collect, so it shrinks when a unit sits empty.

Income minus operating expenses is net operating income (NOI). It leaves out the mortgage, so it matches what the NOI calculator shows for the same property.

Subtract the monthly mortgage payment (principal and interest) from NOI and you have monthly cash flow: the money left before income tax. Annual cash flow is that times 12, and cash flow per unit divides it by the number of units.

Break-even rent is the monthly rent at which cash flow is exactly zero, with the same vacancy rate, management fee, expenses and mortgage. The gap between your rent and break-even rent is your cushion.

The operating expense ratio is operating expenses divided by income. It shows how much of each dollar collected goes to running the property.

Worked example

You own a duplex. Each side rents for $1,600, so rent is $3,200 a month, and a neighbor pays $50 a month to store a boat in the garage. You plan for 5% vacancy. Property taxes run $410 a month, insurance $145, and you set aside $320 a month for repairs and reserves. Water and trash cost $90. A property manager charges 10% of the rent collected. The mortgage payment is $1,516 a month, about what a $240,000, 30-year loan at 6.5% costs.

  1. Rent after vacancy: $3,200 x (1 - 5%) = $3,040. Add the $50 of other income: $3,090 a month.
  2. Management fee: 10% x $3,040 = $304.
  3. Operating expenses: $410 + $145 + $304 + $320 + $90 = $1,269 a month.
  4. Net operating income: $3,090 - $1,269 = $1,821 a month, or $21,852 a year.
  5. Monthly cash flow: $1,821 - $1,516 = $305. Annual cash flow: $305 x 12 = $3,660.
  6. Cash flow per unit: $305 / 2 = $152.50 a month.
  7. Break-even rent: ($410 + $145 + $320 + $90 + $1,516 - $50) / (95% x 90%) = $2,431 / 0.855 = $2,843.27.
  8. Operating expense ratio: $1,269 / $3,090 = 41.07%.

Monthly cash flow is $305.00, or $3,660.00 a year and $152.50 per unit. Rent could fall to $2,843.27 a month before the duplex stops paying for itself, a cushion of about $357.

Frequently asked questions

How do you calculate cash flow on a rental property?

Start with the monthly rent, take off expected vacancy and add any other income. Subtract every operating expense, including taxes, insurance, management, repairs, reserves and utilities you pay. Then subtract the mortgage payment. What is left is monthly cash flow before income tax.

What is the difference between cash flow and NOI?

Net operating income is income minus operating expenses, before the mortgage. Cash flow subtracts the mortgage payment too. NOI describes the property whatever the financing, and cash flow describes what you keep with the loan you have.

What is break-even rent?

It is the monthly rent at which cash flow is zero, after vacancy, the management fee, every expense and the mortgage. Comparing it with the rent you charge shows how far rent can fall, or costs can rise, before the property needs money from you each month.

Why budget for repairs and reserves when nothing is broken?

Roofs, water heaters, appliances and flooring wear out on their own schedule. Setting money aside each month spreads those costs out, so a cash flow estimate that leaves reserves out looks better than the property will perform over a few years.

Is cash flow the same as taxable income?

No. The principal part of the mortgage payment reduces cash flow without being an expense, and depreciation reduces taxable income without costing cash. This calculator shows cash before income tax; ask a tax professional how your rental income is reported.

See your real cash flow every month

KeyRing keeps income and expenses for each property current from your bank feed, across every company you own. Your first subscription starts with a 14-day free trial.

Try KeyRing free