## Best answer

Another much quicker way to estimate cash flow is using a technique known as the50% rule. This rule of thumb states that a rental property鈥檚 expenses tend to be about 50% of the income, not including the mortgage principal and interest (PI) payment. The formula looks like this: Cash Flow = (Total Income x.5) 鈥?Mortgage PI

## People also ask

### How do you estimate rental property cash flow?

Another much quicker way to estimate cash flow is using a technique known as the 50% rule. This rule of thumb states that a rental property鈥檚 expenses tend to be about 50% of the income, not including the mortgage principal and interest (PI) payment. The formula looks like this: Cash Flow = (Total Income x.5) 鈥?Mortgage PI

### What is cash flow in real estate investing?

Simply because cash flow is the money you get to keep in your pocket after deducting all expenses. In other words, it is how you build your wealth in real estate. The cash flow is the difference between the gross rental income and rental property expenses. The cash flow projection of a real estate investment is called pro forma cash flow.

### How much return do you expect on your rental property?

I like to see high returns on my rental properties; over 20% cash on cash. Some people would be happy with 15%, 10%, or even 5% returns on their cash. I also think you need to determine how much cash flow per month is enough.

### How much cash on cash should I invest in rental properties?

Our cash on cash calculator can help you determine what the actual returns will be on your cash invested. I like to see high returns on my rental properties; over 20% cash on cash. Some people would be happy with 15%, 10%, or even 5% returns on their cash. I also think you need to determine how much cash flow per month is enough.