Cash flow
Cash flow is the money left from a rental after rent is collected and all expenses and loan payments are paid.
Cash flow is the money left from a rental after rent is collected and all expenses and loan payments are paid. It is positive when income exceeds costs and negative when costs exceed income.
Why it matters to a Las Vegas investor
Cash flow is what lets a rental support you month to month, so it sits at the center of comparing Las Vegas properties. Vacancy, repairs, management and taxes all reduce it, which is why a full estimate matters more than rent alone.
Read more from Fernwood
- Estimating Return
- Why Invest in Real Estate?
- Risk Management
- From Contract to Cash Flow: The Process That Determines Rental Property Performance
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Questions about Cash flow
Is positive cash flow the same as profit?
Not exactly. Cash flow counts money in and out during a period, while profit may also consider items such as depreciation and taxes.
What reduces cash flow?
Loan payments, taxes, insurance, maintenance, management fees and periods without a tenant all take a share of the rent.