Rental Property Cash Flow Calculator
Work out what a rental actually puts in your pocket each month after debt service and capital reserves — and the breakeven occupancy at which it stops.
Cash Flow Calculator
Results recalculate instantly on every keystroke. Nothing you type is transmitted.
What this result does not account for
- Before income tax. Depreciation and passive-loss treatment are outside a property-level calculation.
- Assumes level debt service for the year; adjustable-rate loans will differ once the rate resets.
- Capital expenditure is entered as an annual average rather than modelled as the lumpy reality it is.
In short: Rental cash flow is NOI minus annual debt service minus capital expenditure. NOI stops at the operating line; cash flow keeps going, which is why a property can show a healthy NOI and still cost you money every month.
Formula
BTCF = NOI − annual debt service
cash flow = BTCF − capex · breakeven occupancy = (opex + debt service) ÷ PGI
[('NOI', 'net operating income, before financing'), ('BTCF', 'before-tax cash flow, after debt service'), ('capex', 'capital expenditure, real cash that NOI ignores'), ('breakeven occupancy', 'the occupancy at which cash flow is zero')]
Worked Example
- Start from NOI — already net of operating expenses and vacancy.
- Compute annual debt service from the loan, rate and amortisation.
- Subtract it to get before-tax cash flow.
- Subtract capital expenditure, which NOI deliberately excludes but your bank account does not.
- Divide operating expenses plus debt service by potential gross income to find the occupancy at which you break even.
84,240 of NOI less 59,730.43 of debt service is 24,509.57 of before-tax cash flow. Take out 6,000 of capital spending and 18,509.57 a year remains — 1,542.46 a month. Breakeven occupancy is 80.48%, so the building can lose roughly one unit in five before it stops paying for itself. Tenants also retired 8,802.09 of principal that year, which does not show in cash flow but is equity all the same.
Strengths & Limits Of This Model
Where this engine is strong
- Separates before-tax cash flow from cash flow after capital spending
- Reports breakeven occupancy, the better distress signal
- Shows principal repayment as equity rather than hiding it
Where it stops
- Pre-tax only
- Level-payment assumption
Practical Use Cases
Underwriting a purchase
Establishing what the property actually pays you after the mortgage and reserves.
Setting a reserve policy
Seeing how capital spending converts positive NOI into thin cash flow.
Judging safety
Reading the breakeven occupancy rather than the headline yield.
Comparing financing
Testing what a larger deposit or longer amortisation does to monthly cash.
Explaining a shortfall
Showing why a property with healthy NOI still requires funding each month.
Methodology & Editorial Standards
Debt service uses the standard annuity payment annualised over twelve months. Before-tax cash flow is NOI less debt service; cash flow subtracts capital expenditure as well, on the basis that capital works are certain in aggregate even though their timing is not. First-year principal is computed by iterating the amortisation month by month rather than approximating, so the equity build shown is exact for the schedule entered.
Computation runs in IEEE-754 double precision at full internal precision; rounding to two decimal places occurs strictly at the display layer, so no cumulative drift enters the result. All monetary outputs use accounting presentation — grouped thousands, two decimals, negatives in parentheses — so figures can be transcribed directly into a model or working paper. Division-by-zero and out-of-domain inputs return an em-dash rather than a misleading number.
This engine was reconciled against an independent reference implementation and hand-verified for the worked example above before release. Our full five-stage review process is published on the About Us page.
Disclaimer. This calculator is provided for informational and modelling purposes only and does not constitute financial, tax, legal, medical, or engineering advice. Verify all figures with a qualified professional before acting on them.
Cash Flow Calculator — 10 Expert FAQs
10 analyst-written answers to the questions practitioners actually ask — optimised for voice and answer-engine retrieval.
Why is my cash flow negative when NOI is positive?
Because NOI stops before the mortgage. NOI measures the building; cash flow measures your position in it. A large loan, a short amortisation or a high rate can consume all of the operating income and more. The building may be perfectly sound while the capital structure is not.
Should capex come out of cash flow?
Yes, if you want the truth. Roofs, boilers and turnovers are certain, not hypothetical — only their timing is unknown. Excluding them produces a number that looks good for several years and then collapses in the year the roof fails. Reserving annually is how professionals smooth it.
What is a good breakeven occupancy?
Lower is safer. Below about 85% gives real room; above 90% means a couple of empty units tip the property into loss. It is a more honest safety measure than cash flow, because it tells you how much has to go wrong before you are funding the asset yourself.
Is cash flow the same as profit?
No. Profit for tax purposes deducts depreciation, which is not a cash cost, and does not deduct principal, which is. It is entirely normal for a rental to show positive cash flow and a taxable loss in the same year, and that combination is one of the reasons the asset class is attractive.
Does principal repayment count as return?
It is return, but not cash. Each payment converts cash into equity, so your wealth rises even though your bank balance does not. Counting it as cash flow is wrong; ignoring it when measuring total return is equally wrong. This page reports it separately for that reason.
How is this different from the business Cash Flow Calculator?
That one reconciles accounting profit to cash for a trading company, adding back non-cash charges and adjusting for working capital movements. This one is property-specific: rent in, operating costs, mortgage and capital works out. Same words, different discipline.
Should I include my own management time?
Yes, as a management fee in operating expenses, even when you self-manage. Your time has a cost, and the next buyer will underwrite a third-party fee whether or not you paid one. Omitting it overstates NOI, cash flow and value simultaneously.
What about income tax?
It sits below everything here. After-tax cash flow depends on depreciation, your marginal rate, passive activity rules and your wider position, none of which is a property-level calculation. Model cash flow first, then take the tax question to an adviser.
How much cash flow should a rental produce?
Rules of thumb such as a hundred a month per unit are popular and nearly useless, because they ignore price, leverage and capital needs. Judge it instead against the cash you have invested — the cash-on-cash return — and against the breakeven occupancy that tells you how fragile the figure is.
Does cash flow include the deposit I paid?
No. The deposit is invested capital, not a running cost, so it never appears in cash flow. It appears in the denominator of the cash-on-cash return, which measures the annual cash against the cash you actually put in.