Rental Property Analysis

How is monthly cash flow calculated?

Review what monthly cash flow includes, what it leaves out, and why small assumption changes matter.

Answer

Monthly cash flow is the amount left over after income, operating expenses, and debt payments are accounted for.

Simple version: Cash Flow = Rent − Expenses − Mortgage

More complete version: Cash Flow = (Rent + Other Income − Vacancy) − Operating Expenses − Monthly Debt Service

Example: Rent = $2,000 Vacancy = $100 Operating expenses = $600 Mortgage = $1,100 Cash flow = $200/month

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