How to calculate rental cash flow
Rental cash flow equals collected income minus operating expenses minus debt service, usually measured per month. It is the before-tax cash flow that investors set against NOI, which is measured before the loan.[1]
| Line | Monthly |
|---|---|
| Rent (2 units) | $3,400 |
| Less vacancy at 5% | ($170) |
| Less operating expenses | ($987) |
| Net operating income | $2,243 |
| Less principal and interest | ($1,850) |
| Cash flow | $393 |
| Cash flow per door | $196 |
Escrowed taxes and insurance are part of most monthly mortgage bills, but they are costs of the property, not of the loan.[2] This calculator asks for them separately so they are counted once, in operating expenses. If you enter your full escrowed payment as "principal and interest", set taxes and insurance to zero.
Break-even rent
Break-even rent is the monthly rent at which cash flow is exactly zero after vacancy, every cost and the mortgage. In the example it is $2,933, about 14% below the current rent. The gap is your cushion: how far rent can fall, or how many months can go empty, before you pay to own the property.
Because management and maintenance are percentages of rent, they shrink when rent falls; the break-even figure already accounts for that.
The stress test
The results panel reruns the numbers three ways: rent 10% lower, vacancy at 10%, and fixed costs (taxes, insurance, HOA, utilities and other costs) 20% higher. A property that still cash-flows under all three is more resilient than one that only works in a good year. Vacancy also moves with the economy: the U.S. national rental vacancy rate was 7.6% in the third quarter of 2026, up from 7.1% a year earlier.[3]
Positive cash flow is not profitCash flow ignores income tax, loan paydown and price changes. The rental income calculator shows taxable income, and the investment property calculator adds equity and sale proceeds.
Cash flow versus taxable income
Cash flow and taxable rental income are different numbers. Principal payments reduce cash but are not deductible; depreciation is deductible but costs no cash.[4] A property can show positive cash flow and a tax loss in the same year, or the reverse late in a loan's life when most of each payment is principal.
Related calculators
- Rental property calculator: works out the mortgage from price, down payment and rate, then cap rate, cash-on-cash and DSCR.
- NOI calculator: the operating statement on its own, for valuation.
- Airbnb calculator: cash flow for a short-term rental, with nightly rates and cleaning.
Frequently asked questions
What is a good cash flow for a rental property?
There is no standard figure. Investors often look at cash flow per door and at the cushion between current rent and break-even rent, because a property that only breaks even has no room for a repair or a vacancy.
Should I include principal in rental cash flow?
Yes. The whole principal-and-interest payment leaves your account each month, so cash flow subtracts it. The principal still builds equity, which is a separate return.
How much should I budget for repairs and capital expenses?
It depends on the age and condition of the building. Use a percentage of rent you can defend from the property's history or an inspection, and keep a separate reserve for big items such as a roof.
Is cash flow the same as NOI?
No. NOI is before the mortgage; cash flow is after it. For an all-cash purchase the two are equal.