--CASH FLOW CALCULATOR--
WHAT IS A CASH FLOW CALCULATOR?
How It Works:
- Gross Rental Income: This is the total income generated from property rentals before any expenses are deducted. It serves as the starting point for calculating cash flow.
- Operating Expenses: These include all costs associated with running and maintaining the property, such as property management fees, maintenance costs, property taxes, insurance, and utilities. These expenses do not include mortgage payments or capital expenditures.
- Financing Costs: This represents the costs related to any debt incurred to purchase the property, primarily interest payments on the mortgage.
The calculator subtracts the total operating expenses and financing costs from the gross rental income to determine the net cash flow.
The formula looks like this:
Net Cash Flow=Gross Rental Income−Operating Expenses−Financing Costs