How to read this result
In the default example, effective gross income is $37,620.00. Results describe this input scenario; they are not a recommendation.
Change one assumption at a time to see how it affects the scenario. Compare periods and cost definitions consistently. Negative results show a modeled shortfall; an unavailable ratio needs a valid denominator.
Formula and methodology
Annualize scheduled monthly rent and other income, apply the vacancy allowance, then deduct annual operating expenses and annual debt service. Divide annual cash flow by 12 for a monthly planning average.
Enter percentages as whole numbers: 5 means 5%. When used as a factor, the calculation divides a percentage by 100. Percentage outputs multiply the final ratio by 100. Calculations retain precision internally; displayed amounts and rates are rounded to two decimals.
Variables and input definitions
- Monthly rent (USD/month)
- Scheduled monthly rent. Minimum: 0.
- Monthly other income (USD/month)
- Other recurring monthly property income. Minimum: 0.
- Vacancy rate (%)
- Expected vacancy/credit loss. Minimum: 0. Maximum: 100.
- Annual operating expenses (USD/year)
- Operating expenses excluding debt service. Minimum: 0.
- Annual debt service (USD/year)
- User-entered annual debt service. Minimum: 0.
Worked example
This example uses the exact prefilled inputs above. Reset defaults to restore this scenario after making changes.
| Item | Default scenario |
|---|---|
| Monthly rent | $3,200.00 |
| Monthly other income | $100.00 |
| Vacancy rate | 5.00% |
| Annual operating expenses | $12,000.00 |
| Annual debt service | $18,000.00 |
| Item | Default scenario |
|---|---|
| Effective gross income | $37,620.00 |
| Annual cash flow | $7,620.00 |
| Monthly average cash flow | $635.00 |
Assumptions and limitations
Cash flow is a scenario estimate and excludes income tax and unmodeled capital events unless the user adds them to expenses.
Results describe this input scenario; they are not a recommendation.
The tool uses values you supply. It does not retrieve market prices, verify leases or inspect a property. Results exclude items outside the listed inputs. Review local requirements and the relevant contract when a payment, fee or allocation depends on them.
Common mistakes
An annual average is not a month-by-month cash budget. Tax bills, repairs and vacancies can occur unevenly. Add reserve spending to the expense assumption if you intend to include it, without counting it twice.
Sources and method references
These references provide context for the method and terminology. They do not endorse this tool or validate your property assumptions.
- IRS — Publication 527 (2025), Residential Rental PropertyRental income and expense concepts; operating/rental expense context.
- Fannie Mae — Selling Guide B3-3.8-01, General Rental Income Information (09/02/2026)Current U.S. rental-income documentation context; comps/market rent and qualifying-income concepts.
Frequently asked questions
Is positive NOI enough for positive cash flow?
No. Debt service and other cash obligations can exceed NOI. This model separates property operations from the cost of financing.
Why is the monthly result an average?
The calculator divides an annual estimate by 12. It does not schedule actual rent collection, seasonal vacancy or the payment dates of expenses.