Calculator guide
Cash Flow Calculator
Monthly cash flow is the money left in your pocket each month after every expense and loan payment is covered. This guide shows exactly how it's calculated.
What the metric means
Monthly cash flow is the money left in your pocket each month after every expense and loan payment is covered. This guide shows exactly how it's calculated.
DealPrism recalculates cash flow anytime rent, vacancy, taxes, insurance, financing, or operating reserves change so investors can pressure-test the same deal quickly.
Formula and variables
Where:
- Effective Gross Income
- Gross rent × (1 − vacancy rate)
- Operating Expenses
- Management, maintenance, CapEx reserves, taxes, and insurance
- Monthly Debt Service
- Principal and interest payment on the loan
Example:
- Effective gross income = $1,980/month
- Operating expenses = $780/month
- Monthly debt service = $960/month
- Step 1: Cash Flow = $1,980 − $780 − $960
- Step 2: Cash Flow = $240/month
After paying all expenses and the mortgage, this property generates $240/month in spendable income — under current assumptions.
What strong vs weak results usually mean
Stronger result: Healthy cash flow leaves room for small shocks. A deal that still works after vacancy, routine repairs, and realistic financing is stronger than one that only works at the edge of break-even.
Weaker result: Weak cash flow is usually exposed by one of three things: rent softness, higher debt service, or underestimated operating costs. Negative cash flow is not automatically disqualifying, but the investor needs a clear reason to accept it.
- Stress test rent and vacancy, not just the base case.
- Treat maintenance and CapEx as recurring requirements, not optional buffers.
- Separate principal and interest from taxes and insurance so the math stays transparent.
Example analysis
If effective gross income is $1,980/month, operating expenses are $780/month, and debt service is $960/month, the estimated monthly cash flow is $240.
This is the point of an underwriting calculator: one number should always be traceable back to its underlying assumptions. If the output changes after a small rent, expense, or financing update, that is not noise. It is the deal showing you where the real sensitivity lives.
Common mistakes
- Ignoring vacancy because the property is currently occupied.
- Treating maintenance and CapEx like optional expenses.
- Forgetting that higher leverage can turn a marginal deal negative.
Related FAQs
Related resources
Why this metric should not stand alone
No serious rental property decision should rely on a single output. A cap rate without financing context, a mortgage payment without operating expenses, or a DSCR without rent validation can all point investors in the wrong direction.
The practical goal is not to memorize formulas. It is to understand which assumption changed, whether that change is realistic, and how the full deal behaves once the inputs are connected.
Analyze your own deal
See this metric in context with your purchase price, rent, expenses, and financing assumptions.
Analyze your own dealDealPrism 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.