Evaluate the financial performance of your investment property by calculating monthly net income and key return metrics.
Estimated Monthly Cash Flow:
1290
Cash-on-Cash Return:
30.96
Cap Rate:
6.192
Cash flow is the net amount of cash moving in and out of an investment property after all expenses and debt obligations have been met. It represents the actual profit you take home each month after the bills are paid.
Formula: Cash Flow = Gross Income - (Operating Expenses + Mortgage Payment)
Example: A $250,000 property with 20% down payment, $2,000 monthly rent, and $1,400 total monthly expenses (including the mortgage).
While it varies by market and investor goals, many rental property owners aim for a minimum of $100 to $300 per unit per month. A higher cash flow provides a safer cushion for unexpected vacancies or major repairs.
The 1% rule is a quick screening tool suggesting that the gross monthly rent should be at least 1% of the property's total purchase price. For example, a property bought for $150,000 should ideally rent for $1,500 per month.
It is standard practice to set aside 5% to 15% of your gross monthly income for maintenance and capital expenditures (CapEx). Older properties typically require a higher percentage to account for aging systems and structural repairs.
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