Run any rental deal in 60 seconds. See monthly cash flow, cash-on-cash return, DSCR, and whether the property passes the 1%, 2%, and 50% rules.
Rental property cash flow is gross rent plus other income, minus a vacancy allowance, minus operating expenses, minus the mortgage payment. Written as a formula: cash flow equals net operating income minus debt service. SealedFolio's rental property cash flow calculator on this page runs those steps and also returns cash-on-cash return, DSCR, and the 1%, 2%, and 50% rule checks. It is free, needs no account, and the numbers you type never leave your browser.
Here is the whole thing on one deal. A $300,000 house rented at $2,200 with 20% down at 7% over 30 years produces $2,090 of effective gross income after a 5% vacancy allowance, $750 in operating expenses, $1,340 in net operating income, and a $1,597 mortgage payment. Monthly cash flow is negative $257, or negative $3,081 a year, on $72,000 invested. That is a cash-on-cash return of negative 4.3% and a DSCR of 0.84. Change any input in SealedFolio's calculator below to find the point where the deal turns positive.
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.
Monthly Cash Flow
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After all expenses including mortgage
Annual Cash Flow
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Cash-on-Cash Return
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Annual cash flow / total cash invested
Enter values above to see breakdown
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.
See pricingRental property cash flow is the money left over each month after the tenant pays and every bill clears, including the mortgage. A property with positive cash flow pays for itself and adds to your income. A property with negative cash flow is a monthly withdrawal from your savings, which is fine if you chose it on purpose and painful if you did not notice until closing. SealedFolio's rental property cash flow calculator exists to make that number obvious before you write the offer.
SealedFolio's rental property cash flow calculator takes inputs in three groups. Income is monthly rent plus anything else the property earns, like laundry, storage, or pet rent. If you are not sure what a unit should rent for, start with the rental income calculator. Purchase and financing set your mortgage payment, assuming a 30 year fixed loan. Operating expenses are the recurring monthly costs of keeping the property running.
You get eight outputs: monthly cash flow, annual cash flow, cash-on-cash return, net operating income, DSCR, and checks against the 1%, 2%, and 50% rules. The breakdown bar shows where every dollar of rent goes, so you can see at a glance whether the mortgage or the operating costs are eating the deal. Nothing you type is sent anywhere, because the whole calculation runs in your browser.
Rental property cash flow comes out of five steps. SealedFolio's calculator runs all five for you, but knowing them makes the output easier to trust and easier to argue with when a seller's pro forma disagrees.
Add up monthly rent plus any other income the property produces. Use real market rent from comparable listings, not the seller's pro forma.
No property stays full forever. Knock 5-8% off gross income for the weeks a unit sits empty between tenants. The result is your effective gross income (EGI).
Deduct property taxes, insurance, maintenance, management, HOA fees, and any utilities you cover. What remains is net operating income (NOI). NOI deliberately excludes the mortgage, which is why it is the number behind cap rate. To value a property by its NOI, use the cap rate calculator. Budget maintenance honestly: water heaters fail, roofs leak, and the HVAC will eventually need replacing, so include a capital expenditure reserve, not just routine repairs.
Take out the monthly principal and interest payment. What is left is cash flow. To see how the payment itself breaks down, or test a 15 year loan, use the rental property mortgage calculator.
A deal that only works when everything goes right is not a deal. Re-run the numbers with two months of vacancy, a $3,000 repair, or an interest rate one point higher. If it still holds up, you have real cushion.
Here is a full rental property cash flow run, the same deal SealedFolio's calculator produces if you type these numbers in. Say you buy at $300,000 with 20% down. That leaves a $240,000 loan at 7% over 30 years, which costs $1,597 a month in principal and interest. The house rents for $2,200. After a 5% vacancy allowance, effective gross income is $2,090.
Operating expenses run $750 a month: $350 in property taxes, $150 for insurance, and a $250 maintenance budget. That puts NOI at $1,340. Subtract the $1,597 mortgage payment and you are at negative $257 a month, about negative $3,081 a year. On $72,000 invested (down payment plus $12,000 in closing costs and repairs), the cash-on-cash return is negative 4.3%.
This deal fails, and that is exactly why you run the numbers before you write an offer. Rent here is only 0.73% of the purchase price, so the 1% rule flagged it from the start. To break even at these expenses, rent would need to reach about $2,471, or the price and loan would need to come down. Plug in your own numbers above and see which side of the line your deal lands on.
These five shortcuts get quoted constantly in rental property discussions, and every one of them is a listing filter, not an answer. SealedFolio's cash flow calculator scores the first, second, and fourth of them against your inputs automatically. Here is what each actually says, and where each one lies to you.
The 1% rule says monthly rent should be at least 1% of a rental property's purchase price, so a $300,000 property should rent for around $3,000 a month. SealedFolio's cash flow calculator prints the real ratio beside your numbers. The worked example above rents for $2,200 on a $300,000 price, which is 0.73%, and it does in fact lose $257 a month. That is the rule working as intended: a fast filter for scanning listings, never a replacement for the line items.
The 2% rule doubles the first test: monthly rent should be at least 2% of the purchase price, which on that same $300,000 house would mean $6,000 a month. Properties that clear 2% are rare in most US metros at current prices, and the ones that do tend to be low-priced homes where turnover, repairs, and collection losses eat the extra yield back. Treat 2% as a benchmark from a cheaper era rather than a target. SealedFolio's calculator shows your ratio against both the 1% and 2% lines so you can see how far off the deal sits.
The 7% rule is the annual version of the same idea: yearly gross rent should be at least 7% of the purchase price. On a $300,000 house that is $21,000 a year, or $1,750 a month. Notice what happens with the worked example on this page. It collects $26,400 a year, which is 8.8% of the price, so it clears 7% comfortably, and it still loses $257 every month once the mortgage and operating expenses land. A gross-yield rule cannot see your interest rate, your tax bill, or your vacancy, which is exactly why SealedFolio's rental property cash flow calculator asks for line items instead of stopping at a ratio.
The 50% rule assumes operating expenses, not counting the mortgage, will average about half of gross rent over the long run. Take half the rent, subtract the mortgage payment, and a negative result means the rental property probably does not cash flow. On the worked example, half of $2,200 is $1,100 against a $1,597 payment, so it fails by $497 a month, and SealedFolio's calculator runs that check for you. The rule runs high for newer properties and low for older ones carrying deferred maintenance, so treat it as a filter, never a substitute for line-item budgeting.
The 3-3-3 rule is a patience framework rather than a cash flow formula, and different investors define it differently, so treat any single version as informal. The version you will see most often: keep three months of personal emergency savings, keep three months of mortgage payments in reserve for the property itself, and compare at least three similar properties before making an offer. No governing body publishes it. The part that touches rental property cash flow is the reserve, and it is worth pricing: three months of the $1,597 payment in the example above is $4,791 that needs to exist in cash on top of the down payment and closing costs you enter into SealedFolio's calculator.
Debt service coverage ratio, or DSCR, is a rental property's net operating income divided by its mortgage payment, and it is the quickest read on whether a deal's cash flow survives its own debt. Above 1.0 the property covers its loan from rent. Below 1.0 it does not, and the shortfall comes from you. SealedFolio's rental property cash flow calculator now returns DSCR alongside monthly cash flow: the worked example carries $1,340 of NOI against a $1,597 payment, so its DSCR is 0.84, which is another way of saying the same deal fails.
DSCR matters beyond your own screening because a whole category of investor loans underwrites the property instead of your W-2, and those lenders set a minimum coverage level you have to clear. The rental property mortgage calculator covers what DSCR loans typically require and what the rate premium costs.
Cash-on-cash return turns a rental property's cash flow into a percentage by measuring annual profit against the actual cash you invested. Put $70,000 into a property (down payment, closing costs, and initial repairs) and collect $6,300 a year in cash flow, and your cash-on-cash return is 9%. SealedFolio's calculator reports it in the results panel as soon as you fill in the purchase and financing fields.
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.
To break that number apart properly, including the formula, a worked example, and how to solve backward from a target return, use the cash-on-cash return calculator. Cash-on-cash only counts cash, though, so it ignores loan paydown and appreciation. For the wider return picture that folds those in, run the deal through the rental ROI calculator.
Most rental property cash flow projections miss low because of costs that never made it into the spreadsheet, not because rent came in short. The line items investors skip most often: a capital expenditure reserve for the roof, HVAC, and water heater, which is separate money from routine maintenance; turnover costs like paint, cleaning, and a lease-up fee every time a tenant leaves; utilities that stay in your name while the unit sits empty; lawn care, snow removal, and pest control; city rental licenses and inspection fees; and the umbrella liability policy most landlords carry on top of the property policy.
Add those into the maintenance and HOA or other fields in SealedFolio's cash flow calculator above and the monthly number usually moves more than people expect. The fix after closing is knowing what these actually cost on your properties rather than guessing at them again next year, which is what the 12-step landlord bookkeeping system is built to produce.
The number SealedFolio's rental property cash flow calculator gives you is pre-tax cash flow, and it usually differs from what you report to the IRS. Depreciation is a deduction you take without spending a dollar, so a property that puts real cash in your pocket can still show a paper loss on your return. Estimate that deduction with the depreciation calculator, then see how the whole picture lands on your Schedule E.
If a rental property you already hold is running thin on cash flow, the levers sit on both sides of the ledger. On the income side: bring rent to market at renewal, and add income streams like pet rent, storage, or paid parking. On the expense side: appeal your property tax assessment if comparable sales support it, requote insurance every year, and review what your property manager charges against what you actually use.
Vacancy is the quiet killer. One month empty wipes out more profit than most expense cuts will ever recover, so responsive maintenance and fair renewals that keep good tenants in place are cash flow strategies too. And if rates drop meaningfully below your note, run a refinance scenario through the mortgage calculator. Buying your first property? The first rental property guide walks the whole process end to end.
Start with gross monthly rent plus other income, subtract a vacancy allowance to get effective gross income, subtract operating expenses (taxes, insurance, maintenance, management, HOA) to get net operating income, then subtract the mortgage payment. What is left each month is your cash flow.
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. Some investors target higher ($500+/unit) in lower-cost markets.
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). An 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. Forgetting to budget for vacancy and maintenance is the most common mistake.
The 50% rule is a screening shortcut: assume operating expenses, not counting the mortgage, will average about half of gross rent over time. If half the rent minus the mortgage payment is negative, the deal is unlikely to cash flow. Use it to filter listings, then confirm with line-item numbers.
The 2% rule says monthly rent should be at least 2% of the purchase price, so a $300,000 property would need to rent for $6,000 a month. Very few properties in mainstream US markets clear it at current prices, and those that do often carry higher turnover and repair costs. Use it as a historical benchmark, not a target.
The 7% rule says a rental property's annual gross rent should be at least 7% of the purchase price, which works out to roughly 0.58% a month. It is a gross yield screen, so it cannot see your interest rate, taxes, insurance, or vacancy. A property can clear 7% on rent and still lose money every month once the mortgage payment lands.
The 3-3-3 rule is an informal framework with no single agreed definition. The version cited most often is three months of personal emergency savings, three months of mortgage payments held in reserve for the property, and at least three comparable properties reviewed before you make an offer. The reserve piece is the part that affects cash flow planning.
DSCR is debt service coverage ratio: net operating income divided by the mortgage payment. A DSCR above 1.0 means rent covers the loan, and below 1.0 means it does not and you make up the difference from other income. Lenders who qualify investors on the property rather than on personal income set a minimum DSCR you have to clear.
Yes, include it. Running the numbers with a management fee of 8-12% of collected rent tells you whether the deal still works when you stop doing the work yourself, whether that is because you move, get busy, or buy enough units that self-managing stops being realistic. A deal that only cash flows because your labor is free is worth identifying before you buy, not after.
Some investors accept a small negative cash flow in markets where rents are rising fast or the current rent is far below market. It is a bet on future income, and it means feeding the property from your other income until it turns. Most first-time investors should hold out for positive cash flow from day one.
SealedFolio tracks actual income and expenses across your entire portfolio, giving you real cash flow data, not estimates.
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