How is monthly cash flow calculated?

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

Cap rate measures how strong a property is without looking at financing. Formula: Cap Rate = Annual NOI ÷ Purchase Price Example: Monthly NOI = $1,250 Annual NOI = $15,000 Purchase price = $220,000 Cap rate = $15,000 ÷ $220,000 = 6.8% Why this matters: Cap rate helps compare properties on their own income vs price, before loans change the picture.

What is DSCR (Debt Service Coverage Ratio)?

DSCR measures whether a property generates enough income to cover its loan payments. Formula: DSCR = Annual NOI ÷ Annual Debt Service Example: Annual NOI = $15,000 Annual debt service = $12,000 DSCR = 1.25 Interpretation: - above 1.0 means the property produces enough income to cover the debt - below 1.0 means the property does not fully cover the debt - many lenders like to see 1.2 or higher Why this matters: DSCR answers the simple question: does the property make enough to pay the loan? It helps you see how much room there is if income drops or expenses rise.

Why should I customize assumptions?

Default assumptions help you get to an initial answer quickly, but the best analysis comes from inputs that reflect your actual plan. If you know your lender quote, contractor estimate, or target rent, updating those values gives you a more realistic analysis.

San Antonio, Texas market guide

San Antonio, TX real estate investment guide

Estimated rent: $1,550/mo · Rent-to-price ratio: 0.54%. See how San Antonio compares on cash flow potential and what assumptions are reasonable for a long-term rental here.

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Market overview

Median home price

$285,000

Estimated market median

Median rent

$1,550/mo

Estimated market median

Rent-to-price ratio

0.54%

Estimated monthly ratio

Population growth

+1.6% YoY

Year-over-year estimate

Example rental property analysis

Monthly cash flow

-$806/mo

Estimated under current assumptions

Cap rate

2.3%

Estimated NOI / purchase price

Cash-on-cash return

-12.1%

Estimated annual cash flow / cash invested

DSCR

0.4

Estimated NOI / debt service

Cash flow considerations

Under current assumptions, an estimated $285,000 purchase with $1,550/mo rent produces about -$806/mo in cash flow, a 2.3% cap rate, -12.1% cash-on-cash return, and 0.4 DSCR.

This example assumes a 25% down payment, 6.5% interest, 7% vacancy, and operator reserves for management, maintenance, and CapEx. Small changes in rent or financing can move estimated monthly cash flow quickly.

Common risks and assumptions

Always validate estimated rent, taxes, insurance, and financing terms for the exact property. Older housing stock, property tax reassessments, or tighter lending can materially change the projected returns shown in this guide.

Use estimated figures only as a starting point.
Validate rent, taxes, insurance, and financing assumptions for the exact address.
Avoid treating this guide as financial, legal, tax, or investment advice.

Related market guides

Frequently asked questions

How is monthly cash flow calculated?: 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
What is cap rate?: Cap rate measures how strong a property is without looking at financing. Formula: Cap Rate = Annual NOI ÷ Purchase Price Example: Monthly NOI = $1,250 Annual NOI = $15,000 Purchase price = $220,000 Cap rate = $15,000 ÷ $220,000 = 6.8% Why this matters: Cap rate helps compare properties on their own income vs price, before loans change the picture.
What is DSCR (Debt Service Coverage Ratio)?: DSCR measures whether a property generates enough income to cover its loan payments. Formula: DSCR = Annual NOI ÷ Annual Debt Service Example: Annual NOI = $15,000 Annual debt service = $12,000 DSCR = 1.25 Interpretation: - above 1.0 means the property produces enough income to cover the debt - below 1.0 means the property does not fully cover the debt - many lenders like to see 1.2 or higher Why this matters: DSCR answers the simple question: does the property make enough to pay the loan? It helps you see how much room there is if income drops or expenses rise.
Why should I customize assumptions?: Default assumptions help you get to an initial answer quickly, but the best analysis comes from inputs that reflect your actual plan. If you know your lender quote, contractor estimate, or target rent, updating those values gives you a more realistic analysis.

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DealPrism provides educational analysis based on available data and user assumptions. Results are estimates and may change if rent, taxes, insurance, financing, or other inputs are updated. This content is not financial, legal, tax, or investment advice.