BiggerPockets Real Estate Podcast How to Calculate Cash Flow on a Rental Property
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Dec 12, 2025 In this engaging discussion, Ashley Kehr, co-host of the Real Estate Rookie podcast and seasoned rental investor, joins to demystify cash flow calculations. She reveals why 99% of investors botch the math and shares expert insights on estimating fixed and variable expenses. Learn how small tweaks can enhance your cash flow and what constitutes a solid deal. Plus, Ashley provides tips on setting aside emergency reserves and understanding property management fees to maximize your investment potential!
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Calculate Cash Flow Correctly
- Do not calculate cash flow by subtracting only the mortgage from rent.
- Include all necessary inputs to get a true cash flow number.
Fixed Versus Variable Expenses
- Distinguish fixed expenses from variable expenses when underwriting.
- Variable items like repairs, CapEx, turnover and vacancy must be averaged monthly.
Use Percentages For Unknowns
- Use percentage estimates for vacancy, repairs, and CapEx when you lack exact data.
- Start with a minimum 5% for vacancy and increase to 8–10% for riskier properties.