What does it mean for a rental property to cash flow?

A rental cash flows when the monthly rent covers ALL costs of ownership — mortgage payment, taxes, insurance, maintenance, vacancy allowance, and management — with money left over. Positive cash flow means the property pays you every month; negative means you pay it.

What is the 1% rule in real estate?

A quick screening rule: monthly rent should be at least 1% of the purchase price (a $150,000 house should rent for $1,500+). Deals that pass usually cash flow; deals that fail usually don't. It's a filter, not a substitute for running full numbers.

What is a good cash-on-cash return?

Cash-on-cash return = annual cash flow divided by the actual cash you invested (down payment + closing costs). Many buy-and-hold investors target 8–12%. Below ~5%, the deal depends heavily on appreciation; above 12% is strong in most markets.

What expenses do new landlords forget?

Vacancy (budget ~5–8% of rent), maintenance and capital reserves (~5–10%), and property management even if self-managing today — your time isn't free and plans change. A deal that only works at 0% vacancy and $0 repairs is not a deal.

Does It Cash Flow?

Free · No signup required · Updated July 2026 · Built by a self-managing landlord · 13 units in Pennsylvania since 2020

Looking at a rental deal? Enter the price, financing, rent, and expenses — and see instantly whether it pays you every month or you pay it. Cap rate, cash-on-cash return, and the 1% rule included, with every number shown.

Purchase & financing

Purchase price ($)

Down payment (%)

Interest rate (%)

Loan term (years)

Closing costs ($) optional

Income

Expected monthly rent ($)

Operating expenses

Property tax ($/yr)

Insurance ($/yr)

HOA ($/mo)

Maintenance (% of rent)

Vacancy (% of rent)

Management (% of rent)

Cash-on-cash return

Annual cash flow ÷ the cash you put in — the interest rate your money earns. 8%+ is strong.

Cap rate

Income minus expenses (no mortgage) ÷ price. Rates the deal itself, regardless of financing. 6%+ is healthy in most markets.

1% rule

Quick screen: monthly rent ≥ 1% of purchase price. Passing means it’s worth running the full numbers — a filter, not a verdict.

Cash invested

Down payment + closing costs — the out-of-pocket base your cash-on-cash return is measured against.

This is the quick math. The full Deal Analyzer goes deeper.

Inside LandlordPro: model rehab costs and renovation delays, check DSCR for lender qualification, save every deal you analyze, and compare them side-by-side. Then when you buy, the same account tracks your REAL cash flow — actual rent collected, AI-scanned receipts, mortgage interest, and depreciation. Free to start — up to 4 units and 3 full deal analyses included.

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How this calculator works

Monthly cash flow = rent − mortgage payment (principal & interest) − taxes − insurance − HOA − maintenance reserve − vacancy allowance − management. If that number is positive, the property pays you; if negative, you subsidize it every month.

Cap rate = net operating income (income minus operating expenses, excluding the mortgage) ÷ purchase price. It measures the deal itself, independent of how you finance it.

Cash-on-cash return = annual cash flow ÷ cash you actually put in (down payment + closing costs). This is the number to compare against other uses of your money.

Frequently asked questions

What counts as "cash flowing"?

Positive monthly cash flow after ALL expenses — including the ones that don't bill you monthly, like vacancy and future repairs. A property that's positive only because you budgeted $0 for maintenance isn't cash flowing; it's waiting.

What is the 1% rule?

A screening shortcut: monthly rent ≥ 1% of purchase price. A $150,000 house should rent for $1,500+. Deals that pass usually pencil out; deals that fail usually don't. Use it to filter, then run the full numbers here.

What's a good cash-on-cash return?

Many buy-and-hold investors target 8–12%. Under ~5%, you're betting mostly on appreciation. Over 12% is strong in most markets — double-check your expense assumptions aren't optimistic.

Why budget vacancy and maintenance if the house is new and rented?

Because averages arrive eventually. 5% vacancy is about 2.5 weeks per year — one turnover. 5–10% maintenance covers the water heater that fails in year three. Deals should survive average luck, not require perfect luck.

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This calculator is provided for convenience and general information only and is not financial, investment, or legal advice. Verify all numbers for your market and situation.