Rental cash flow is the number that determines whether a property actually supports itself month to month. Reaixo calculates it in six explicit steps, each of which you can see broken out in the Rental Cash Flow Calculator's results.
The Six-Step Calculation
- Gross income — monthly rent plus any other income (parking, laundry, storage).
- Subtract vacancy — a percentage allowance for time between tenants.
- Subtract operating expenses — taxes, insurance, HOA, management, maintenance, CapEx reserve, utilities.
- That leaves NOI — Net Operating Income, before any mortgage payment.
- Subtract mortgage principal & interest — the standard amortization payment for the loan amount, rate and term.
- What remains is monthly cash flow — positive, break-even, or negative.
Why Vacancy and CapEx Are Easy to Underestimate
These two line items are the most common way investors overstate their own cash flow. Vacancy is easy to ignore when a property is currently occupied, but every rental experiences turnover eventually. A capital expenditure reserve is easy to skip when nothing is currently broken — but a roof or HVAC system doesn't ask permission before it needs replacing. Reaixo includes both by default specifically because skipping them produces a number that looks better than the property will actually perform over time.
What Cash Flow Does Not Include
Cash flow is a single-period snapshot. It does not include property appreciation, the equity you build as the loan balance is paid down, tax effects (depreciation, deductions), or eventual selling costs — all real components of total return, just not part of this specific number.
Related terms: Net Operating Income, DSCR in the full glossary.