## 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

### 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.

### What is real estate cash flow and how does it work?

You can think of real estate cash flow sort of like a waterfall. The investor (you) is at the bottom. Here鈥檚 what that waterfall looks like: Collect rent. Operating expense payments (taxes, insurance, maintenance, etc) Capital expense payments (replace roof, heat-air system, etc) Mortgage payments. Income tax payments.

### 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.