🏘️ Cash Flow

Reading your cash flow numbers

Positive monthly cash flow means the property pays for itself and puts money in your pocket. Even $100–200/month per unit is solid for a leveraged deal.
Always include vacancy allowance — 5–8% for strong rental markets, 8–12% in markets with higher turnover.
Management fees typically run 8–10% of collected rent, even if you self-manage. Account for it so the deal works with or without you.
Maintenance reserves of 5–10% of rent cover ongoing repairs, appliance replacements, and turnover costs.
If cash flow is negative, you're subsidizing the property from your paycheck. That's speculation, not investing.
Stack this with cap rate and cash-on-cash to get a complete picture of a deal's quality.

Formula:
Gross income = Monthly rent + Other income
Vacancy = Gross income × Vacancy %
Total expenses = Mortgage + Tax + Insurance + Maintenance + Management
Cash flow = Gross income − Vacancy − Total expenses

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