Analyze any rental property deal in 60 seconds. See monthly cash flow, annual profit, and cash-on-cash return.
Typical: 5-8% (1-2 months vacancy over 2 years)
Rule of thumb: 1-2% of property value per year / 12
Typical: 8-12% of collected rent. $0 if self-managing.
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Annual cash flow / total cash invested
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Track Real Cash Flow with SealedFolio
SealedFolio tracks actual income and expenses for every property, so you always know your real cash flow, not just estimates.
Join WaitlistCash flow is the lifeblood of rental property investing. A property that generates positive cash flow covers all its own expenses and puts money in your pocket each month. A property with negative cash flow requires you to subsidize it from other income, draining your savings and limiting your ability to grow.
The formula is straightforward: take your gross rental income, subtract vacancy allowance to get effective gross income, then subtract all operating expenses and your mortgage payment. What's left is your monthly cash flow.
The key is being honest about expenses. New investors often forget to budget for vacancy (even great properties sit empty between tenants), maintenance surprises (water heaters fail, roofs leak), and capital expenditure reserves (eventually the roof and HVAC need replacing). Underestimating expenses is the most common reason investors think a property will cash flow when it actually won't.
Cash-on-cash return measures your annual profit relative to the actual cash you invested. If you put $70,000 into a property (down payment + closing costs + repairs) and it generates $6,300 per year in cash flow, your cash-on-cash return is 9%.
A cash-on-cash return of 8-12% is generally considered good for residential rental property. Returns above 12% are excellent but may indicate higher-risk properties or markets. Returns below 5% may not justify the work and risk of being a landlord when you could invest in index funds with less effort.
The 1% rule is a quick screening test: the monthly rent should be at least 1% of the purchase price. A $300,000 property should rent for at least $3,000/month. Properties meeting this threshold are more likely to cash flow positively. It's not a guarantee, you still need to run the full analysis, but it's a useful filter when scanning listings.
A positive cash flow of $200-$400 per month per unit is generally considered a good target for residential rental properties. This provides a buffer for unexpected expenses while still generating meaningful profit.
Cash-on-cash return measures the annual pre-tax cash flow as a percentage of the total cash invested (down payment, closing costs, and initial repairs). A 8-12% cash-on-cash return is generally considered good for residential rental properties.
Include all operating expenses: mortgage payment (principal and interest), property taxes, insurance, property management fees (8-12%), maintenance (1-2% of property value), vacancy allowance (5-8% of rent), HOA fees, and utilities paid by the landlord.
SealedFolio tracks actual income and expenses across your entire portfolio, giving you real cash flow data, not estimates.
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