Real estate & rental
Rental Property Cash Flow Calculator
Works cash flow on a rental, where the timing within the year is the part that bites.
Result
Profit and cash are different things and a growing contractor can run out of cash while profitable, because the work is paid for before the invoice is. This models collection speed, not seasonality.
Get a Free Business AuditHow the calculation works
Monthly rent less vacancy, operating expenses, capital reserve and debt service, shown monthly and annually. Modelling the year month by month rather than only annually reveals the negative months, which exist in most single-property holdings and are a liquidity problem distinct from whether the property is profitable.
What moves the number
- When tax instalments and insurance renewals fall.
- Vacancy, which arrives in blocks rather than evenly.
- Capital reserve, which should be funded monthly.
- Debt service, which is the only truly level item.
Where this one goes wrong
The reserve has to be funded in the good months to be available in the bad ones, which means the monthly cash flow figure should already be net of it rather than treating the reserve as something to fund from a surplus that may not appear. The other point is that a single property cannot average its vacancy, so the realistic bad case is a two-month void alongside a repair, and the holding either survives that or it does not.
Before you quote
- Fund the reserve monthly rather than from a hoped-for surplus.
- Model the specific months when large expenses fall.
- Stress test a two-month void plus a repair.
Questions
About this calculator
Why does a profitable rental run short some months?
Because rent is level and expenses are not. Tax instalments and insurance renewals land in particular months, and a property that is annually positive can be monthly negative several times a year without anything being wrong.
When should the reserve be funded?
Monthly, so the cash flow figure is already net of it. Treating the reserve as something to fund from a year-end surplus means it gets funded only in years that had one, which is not how component failure schedules itself.
What is a realistic bad case for one property?
A two-month void alongside a significant repair, because a single property cannot average its vacancy. Whether the holding survives that, without the owner funding it from elsewhere, is the test worth running before purchase.
The formula
cash tied up = daily invoicing x days to get paid
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How to use this calculator
- Invoiced per month ($). Enter your own figure; the page starts at $38,000.
- Payment terms (days). Enter your own figure; the page starts at 30.
- Days clients actually take. Enter your own figure; the page starts at 46.
- Costs paid out per month ($). Enter your own figure; the page starts at $38,000.
- Cash in the bank now ($). Enter your own figure; the page starts at $22,000.
The result updates as you type, so you can try a figure, see what it does to days of funding gap, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Invoiced per month | $38,000 |
| Payment terms (days) | 30 |
| Days clients actually take | 46 |
| Costs paid out per month | $38,000 |
| Cash in the bank now | $22,000 |
What comes out
| Result | Value |
|---|---|
| Days of funding gap main result | 16 |
| Cash tied up in invoices | $58,267 |
| Monthly surplus | $0 |
| Months of cover | 999.0 |
There is $58,267 sitting in unpaid invoices, and customers take 16 days longer than your terms allow. That gap is the money you are lending them for free.
How sensitive the answer is
Holding everything else steady and changing only invoiced per month, this is what happens to days of funding gap. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Invoiced per month ($) | Days of funding gap |
|---|---|
| $19,000 | 16 |
| $28,500 | 16 |
| $38,000 example above | 16 |
| $57,000 | 16 |
| $76,000 | 16 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Invoiced per month ($)
- A money amount, starting at $38,000.
- Payment terms (days)
- A number, between 0 and 180, starting at 30.
- Days clients actually take
- A number, between 0 and 365, starting at 46.
- Costs paid out per month ($)
- A money amount, starting at $38,000.
- Cash in the bank now ($)
- A money amount, starting at $22,000.
What the results tell you
| Result | What it is |
|---|---|
| Days of funding gap | The headline result. A number. |
| Cash tied up in invoices | A money figure. |
| Monthly surplus | A money figure. |
| Months of cover | A decimal figure. |
What is not in this number
Property figures here exclude the costs that decide whether a deal works: vacancy, maintenance, management, capital expenditure and the transaction costs at both ends. A return that looks strong before those frequently does not survive them.
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.