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Cash Flow Calculator

Investment Property Analysis

Purchase Price The total purchase price of the investment property before closing costs.

Down Payment Percentage of purchase price paid upfront. Investment properties typically require 20-25% down.

Closing Costs One-time acquisition costs (title, escrow, lender fees, etc.). Typically 2-5% of purchase price.

Interest Rate Annual mortgage interest rate. Investment property rates are typically 0.5-1% higher than primary residence rates.

Loan Term Length of mortgage in years. 30-year terms have lower payments; 15-year terms build equity faster.

yrs

Down Payment $75,000

Loan Amount $225,000

Total Cash Invested $84,000

Monthly Rent Expected monthly rental income. Research comparable rentals on Zillow, Rentometer, or local listings. Be conservative.

Other Monthly Income Additional income: pet rent, parking, storage, laundry, late fees, etc.

Vacancy Rate Expected vacancy between tenants. 5% ≈ 18 days/year, 8% ≈ 1 month/year. Includes turnover time for cleaning, repairs, and re-leasing. 5%

0% 20%

Gross Scheduled Income $2,400/mo

Less: Vacancy -$120/mo

Effective Gross Income $2,280/mo

Property Tax/yr Annual property taxes. Check county assessor website. May reset after purchase based on sale price.

Insurance/yr Annual landlord/rental property insurance. Get actual quotes—rates vary significantly by location.

HOA/mo Monthly HOA dues if applicable. Common for condos/townhomes. Check for special assessments.

Utilities/mo Utilities paid by landlord (if any). Most SFR rentals pass all utilities to tenants ($0).

Property Management Professional property management fee. Typically 8-12% of rent. Include even if self-managing—your time has value. 10%

0% 15%

Repairs & Maintenance Ongoing repairs, landscaping, cleaning, small fixes. 5-10% of rent is standard. Older homes need more. 5%

0% 15%

CapEx Reserve Reserve for major replacements: roof, HVAC, water heater, appliances. Set aside 5-10% monthly. 5%

0% 15%

Other Annual Expenses Other annual costs: lawn care, pest control, snow removal, accounting, legal, licenses, advertising, etc.

Total Monthly OpEx -$930

Total Annual OpEx -$11,160

✓ Positive Cash Flow

Monthly Cash Flow

$352

per month after all expenses & mortgage

$4,224 / year

Cash-on-Cash
5.0%
Return on cash invested

Cap Rate

5.4%

NOI ÷ Price

NOI

$16,200

Net Operating Income

Debt Service

$17,976

Annual mortgage P&I

OpEx Ratio

41%

Operating expenses %

Break-Even

85%

Min occupancy needed

Quick Investment Rules Check

1% Rule PASS

0.80%

Target: Rent ≥ 1% of price

50% Rule PASS

41%

Target: OpEx ≤ 50% of rent

GRM PASS

10.4

Target: GRM ≤ 12

Monthly Cash Flow Breakdown

Total Income +$2,280

Gross Rent +$2,400

Other Income +$0

Less: Vacancy (5%) -$120

Operating Expenses -$930

Property Tax -$300

Insurance -$150

HOA -$0

Utilities -$0

Property Management (10%) -$228

Repairs & Maintenance (5%) -$120

CapEx Reserve (5%) -$120

Other Expenses -$0

Net Operating Income (NOI) $1,350

Less: Mortgage Payment (P&I) -$1,498

Monthly Cash Flow $352

Cash Flow Waterfall

Effective Income

Operating Expenses

Debt Service

Cash Flow

📖 Cash Flow Glossary

Cash Flow

The money remaining each month after ALL expenses including mortgage payment. Positive cash flow = income exceeds expenses. This is actual money in your pocket.

Formula: Cash Flow = NOI - Mortgage Payment (P&I)

Net Operating Income (NOI)

Total rental income minus operating expenses, EXCLUDING mortgage payments. The foundation for most real estate valuations and the numerator in cap rate calculations.

Formula: NOI = Effective Gross Income - Operating Expenses

Cash-on-Cash Return (CoC)

Annual pre-tax cash flow divided by total cash invested. Measures the return on your actual out-of-pocket investment, accounting for leverage. The “yield” on your cash.

Formula: CoC = (Annual Cash Flow / Total Cash Invested) × 100

Cap Rate (Capitalization Rate)

Annual NOI divided by property price. Measures return assuming an all-cash purchase (no mortgage). Used to compare properties regardless of financing.

Formula: Cap Rate = (Annual NOI / Purchase Price) × 100

Gross Scheduled Income (GSI)

The total potential rental income if the property is 100% occupied all year with no collection losses. Also called Potential Gross Income (PGI).

Formula: GSI = Monthly Rent × 12

Effective Gross Income (EGI)

Gross scheduled income minus vacancy and credit losses, plus other income. This is the realistic income you can expect to collect.

Formula: EGI = GSI - Vacancy Loss + Other Income

Operating Expense Ratio (OER)

Operating expenses divided by effective gross income. Industry average for residential rentals is 35-45%. Higher ratio = less profitable operations.

Formula: OER = (Operating Expenses / EGI) × 100

Break-Even Occupancy

The minimum occupancy rate needed to cover all expenses plus debt service. Below this, you’re losing money. Lower is better—more cushion.

Formula: Break-Even = (OpEx + Debt Service) / GSI × 100

1% Rule

A quick screening rule: monthly rent should be at least 1% of the purchase price. Example: $300K property should rent for $3,000+/month. Higher % = better cash flow potential.

Formula: 1% Rule = (Monthly Rent / Purchase Price) × 100

50% Rule

A rule of thumb: operating expenses (excluding mortgage) typically equal about 50% of gross rent. Use this for quick estimates when detailed expenses aren’t available.

Formula: 50% Rule Check = Operating Expenses ≤ 50% of Rent

Gross Rent Multiplier (GRM)

Purchase price divided by annual gross rent. A quick screening tool—lower GRM = better value relative to rent. Good GRM is typically under 12.

Formula: GRM = Purchase Price / Annual Gross Rent

CapEx (Capital Expenditures)

Reserve fund for major repairs and replacements that extend property life: roof, HVAC, water heater, flooring, appliances. Smart investors set aside 5-10% of rent monthly.

Vacancy Rate

Percentage of time property sits vacant between tenants. Includes turnover time for cleaning, repairs, marketing, and re-leasing. 5% ≈ 18 days/year; 8% ≈ 1 month/year.

Debt Service

The total mortgage payment amount (principal + interest). Does not include taxes or insurance (those are operating expenses). This is what you owe the lender each period.

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Ziffy.ai shows cash flow, NOI, cap rate, and ROI on every listing. Search 2M+ investment properties.

247 Cayuga Rd. Ste 700, Buffalo, New York – 14225

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