Is This Rental Property Worth It?
If a property rents for $2,400 per month, is it actually a good deal?
A lot of rental properties look profitable at first glance. The rent seems high enough, the listing looks clean, and the numbers appear simple. But once you factor in financing, vacancy, maintenance, taxes, insurance, and other recurring costs, the real monthly cash flow can look very different.
This page is built to answer that question directly. Use the calculator below, then compare your result against a realistic example so you can see whether a rental property is merely collecting rent or actually producing usable income.
Rental Property Cash Flow Calculator
Estimate monthly cash flow, annual cash flow, and cash-on-cash return using purchase price, financing, rent, vacancy, maintenance, and recurring ownership costs.
Estimated monthly cash flow
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Example: A $300,000 rental property
Let’s walk through a simple example using the same numbers preloaded into the calculator:
- Purchase price: $300,000
- Down payment: $60,000
- Loan amount: $240,000
- Interest rate: 6.75%
- Loan term: 30 years
- Monthly rent: $2,400
- Monthly property tax: $300
- Monthly insurance: $125
- Vacancy rate: 5%
- Maintenance rate: 8%
In a case like this, the property may produce only a few hundred dollars per month in actual cash flow after recurring costs. That is a much more realistic picture than simply subtracting the mortgage payment from the rent and assuming the rest is profit.
This is why rental property analysis matters. A deal can look fine on paper and still be marginal once you include the costs that owners inevitably face over time.
What counts as good cash flow?
There is no universal rule, but for a single rental property many investors think about monthly cash flow in rough tiers:
- $0 to $200 per month: thin margin
- $200 to $500 per month: solid
- $500 or more per month: strong
The context matters. Higher-cost markets often produce lower cash flow while lower-cost markets may produce stronger monthly income. The important question is not whether the rent sounds large, but whether enough money remains after realistic expenses.
Why many rental properties barely cash flow
Many investors underestimate just how much gets absorbed by recurring costs. A property may have decent rent, but still struggle because of:
- high financing costs
- property taxes
- insurance
- vacancy periods between tenants
- maintenance and repair reserves
- HOA fees, if applicable
This is also why simple “rent minus mortgage” math is usually too optimistic. The more realistic version includes the costs you know are coming, not just the ones that appear most obvious.
Cash flow vs appreciation
Some properties are bought primarily for monthly cash flow. Others are bought because the investor expects long-term appreciation, neighborhood improvement, or loan paydown to create value over time.
That distinction matters. A property with mediocre cash flow might still make sense if it is in an area with unusual long-term upside. But if the property is weak on both monthly cash flow and future potential, the deal becomes much harder to justify.
What cash-on-cash return means
Cash-on-cash return measures how much annual cash flow you generate relative to the cash you put into the deal upfront.
For example, if you invest $60,000 as a down payment and the property produces $4,800 in annual cash flow, your cash-on-cash return would be 8%.
It is a useful way to compare rental property deals because it focuses on the actual cash yield from your invested capital rather than only the property’s headline rent.
Final takeaway
A rental property is not automatically a good investment just because it generates rent.
What matters is what is left after financing and realistic operating costs. That is the number that tells you whether the property is merely occupied or actually working for you as an investment.
Use the calculator above to test multiple scenarios before you make a decision. Small changes in purchase price, rate, rent, or maintenance assumptions can turn a thin deal into a bad one or a decent one into a strong one.
Frequently asked questions
What is a good monthly cash flow for a rental property?
There is no universal rule, but many investors see a few hundred dollars per month as a meaningful positive result for a single rental property. Stronger deals may produce more, while higher-cost markets may produce less.
Why do many rental properties have low or negative cash flow?
Because the obvious numbers are only part of the picture. Mortgage payments, taxes, insurance, vacancy, maintenance, and HOA fees can quickly reduce or eliminate apparent profit.
What is cash-on-cash return?
Cash-on-cash return measures annual pre-tax cash flow relative to the amount of cash you invested upfront, usually your down payment.
Does positive cash flow automatically mean a good investment?
No. Positive cash flow is important, but you should also consider property quality, location, maintenance risk, financing terms, and long-term goals.
Explore more financial tools
Want to estimate financing costs separately? Try our mortgage calculator.
Planning for long-term investing too? Use our compound interest calculator.
Compare this page with the standalone real estate cash flow calculator if you want the tool-only version.
Not sure if your deal is good?
Use a real example to see how rental property numbers actually work in practice.