Yield ratios describe a property. Cash flow describes your bank account after the property has finished with it. This calculator puts the two on one screen: the rent a property really collects after vacancy, minus the mortgage payment, property tax, insurance, management, maintenance and community fees, line by line — leaving the monthly and annual cash flow, and the cash-on-cash return: that annual flow divided by the cash you actually invested (down payment plus closing costs). It is the difference between a property that looks good in a listing and one that pays you every month.
How each line is worked out
The loan is the price minus your down payment, and its payment is the standard fixed-rate amortisation at your rate and term. Collected rent is the asking rent reduced by your vacancy percentage — at 5%, roughly eighteen empty days a year, which is optimistic for many streets and kind for none. Management is charged on the rent actually collected, the way agents charge it. Tax and insurance are entered yearly and spread monthly, because that is how they behave in a budget even if they are billed in lumps. Maintenance is a monthly allowance: small most months, and then one boiler. Add the lines up, subtract from collected rent, and the remainder is the cash flow — positive, negative, or embarrassingly close to zero.
A worked example
A 250,000 purchase with 20% down (50,000) and 5,000 of closing costs puts 55,000 of your cash in. The 200,000 loan at 6.5% over 30 years costs 1,264.14 a month. Rent of 2,200 at 5% vacancy collects 2,090; management at 8% takes 167.20; tax adds 250 a month, insurance 125, maintenance 100 — total outgoings 1,906.34. Cash flow: +183.66 a month, +2,203.97 a year, a cash-on-cash return of 4.01% on the 55,000 invested. Note how much work the rent is doing: at 2,000 a month instead of 2,200 the same property is roughly break-even, and at 1,900 it pays you nothing and bills you for the privilege.
Cash flow is not the whole return — and not nothing either
Every mortgage payment also pays down principal, which is real wealth moving from the lender’s column to yours, and a property may appreciate. Neither shows up here, deliberately: this tool answers the monthly question, can I hold this property without feeding it? Investors get into trouble holding “great long-term” properties whose monthly bleed they cannot fund. Run your real tax and insurance figures (ask the seller or the municipality — listings routinely understate both), keep vacancy honest, include management even if you plan to self-manage at first because your time is the fee you are not counting, and treat a thin positive flow as what it is: a property one repair away from a negative year.
Two reserves this screen leaves to you
Maintenance here is the running kind — dripping taps, appliance swaps, repainting between tenants. Capital expenditure is the other kind: the roof, the boiler system, the lift contribution in a block — big, rare, and certain to arrive eventually. Many landlords reserve a further percentage of rent for it inside the maintenance line; if your building is older, double the default figure mentally and see whether the deal still stands. Income tax is the second absence, and it is genuinely yours alone: the same cash flow is taxed differently for an individual, a company and a foreign owner, and the mortgage interest’s deductibility differs too. The screen’s job is to make sure there is a flow worth taxing — and to show you, before the purchase rather than after it, exactly how many euros of monthly slack that flow really contains.
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Versión en español: Calcular Cash Flow Inversión Inmobiliaria Excel Online: Flujo Mensual, Cap Rate, Cash on Cash y Descarga CSV · Cap Rate Calculator · Net Rental Yield Calculator.
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