What is left after everything is paid?

Cash flow is the question the other metrics orbit

Cap rate, cash-on-cash, DSCR — each one is a ratio built somewhere on top of the same underlying stream: what the property collects, what it costs, and what is left. This page computes that stream directly, on a monthly basis, because that is how a rental is actually lived with — the rent arrives monthly, the mortgage leaves monthly, and a rental property that "does well annually" but runs negative from March to August still has to be floated from your other accounts in the meantime.

How the number is computed

Collected income first: the rent discounted by a vacancy allowance, plus other income. Operating costs next — taxes, insurance, management, repairs, HOA, owner-paid utilities — which leaves NOI per month. Then the two outflows that are not operating expenses but are absolutely cash: the CapEx reserve you set aside for roofs and furnaces, and the mortgage payment. What survives all of it is monthly cash flow; twelve of those is the annual figure, and the margin states it against every collected dollar. Taxes and insurance are asked for monthly here — divide the annual bills by twelve — so every line is on the same clock.

What a good result looks like

A widely used screen is $100–$300 per unit per month after everything, reserves included, with the margin — cash flow over collected income — landing somewhere in the 5–15% range on financed stabilized rentals. But context beats the rule of thumb: a thin margin on a property amortizing an aggressive 15-year note is building equity fast, while the same margin on a 30-year interest-heavy loan has no such excuse. A negative number is not automatically a bad deal — value-add projects run negative on purpose during renovation — but it should always be a chosen number, with a plan and a date attached, never a surprise discovered in month three.

Common mistakes

Almost every inflated cash-flow projection fails the same four ways. No vacancy, because the current tenant "never leaves" — until the month they do, which costs a turnover on top of the empty weeks. No CapEx reserve, which converts one water heater into three months of paper profit gone. No management line from self-managing owners, valuing their evenings at zero when a buyer or lender will underwrite 8–10% of rent regardless. And annualized optimism — quoting the best month times twelve rather than an average that includes the furnace call and the vacancy. Enter honest averages above and the number that comes back is one you can plan on, not one you have to defend.

When the answer matters to a lender, it stops being one property's number: an underwriter reads cash flow across everything you own. The free Schedule of Real Estate Owned generator builds that portfolio view in the standard format, from the same figures this page works with — and the cash-on-cash calculator turns this page's answer into the return on the cash you put in.