Cash flow is the money left over each month after collecting rent and paying all operating expenses and debt service (mortgage, taxes, insurance, maintenance, vacancy, and management). Positive cash flow means the property earns more than it costs to own.

Monthly cash flow = gross rental income − operating expenses − mortgage payment. Annual cash flow is that figure times twelve. To weigh it against your invested capital, use our cash on cash return calculator.

Many investors target at least $100–$200 in monthly cash flow per unit, but the right number depends on your market, financing, and risk tolerance. The key is that income reliably exceeds expenses with a buffer for vacancy and repairs.

Common expenses include property taxes, insurance, property management, maintenance and repairs, vacancy allowance, utilities you cover, HOA dues, and your loan payment. Financing costs are often the largest — compare loan options on our loans page.