How to Calculate Cash Flow on Rental Properties


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Annual Cash Flow

Annual Net Operating Income $16,791
- Annual Mortgage Payments - $15,244
- Annual PMI Payments - $0
Annual Cash Flow = $1,547

Cash Flow is really just Net Operating Income minus all the financing costs for the property. That's because Net Operating Income already accounts for vacancy and the other Operating Expenses for the property.

For Typical 25% Down Payment Gainesville, Florida Rental Property we have a Net Operating Income of $26,888.40 per year or $2,240.70 per month.

The monthly payment for the mortgage on Typical 25% Down Payment Gainesville, Florida Rental Property is $1,270.32. If we multiply that by 12, we get mortgage payments of $15,243.84 per year.

And the Private Mortgage Insurance premiums for Typical 25% Down Payment Gainesville, Florida Rental Property are $0. The total for the year is $0.

So, if we take the Net Operating Income and subtract the mortgage payments and private mortgage insurance (PMI) we get an annual Cash Flow of $1,547.12.

That's $128.93 per month in Cash Flow.

Annual Cash Flow

Annual Net Operating Income $16,791
- Annual Mortgage Payments - $15,244
- Annual PMI Payments - $0
Annual Cash Flow = $1,547

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