Rent checks arrive, operating expenses go out, and the mortgage is paid. What remains is cash flow. Positive cash flow means the property puts money in the owner’s pocket each month; negative cash flow means the owner must contribute.

Investors track both before-tax and after-tax cash flow. Vacancy, repairs, property management fees, and capital expenditures all affect the result. A property can appreciate nicely yet still produce thin or negative cash flow if expenses or debt service run high.

Strong cash flow provides a buffer against vacancies and rate increases. Many investors prioritize it over pure appreciation, especially in retirement or when using the income for living expenses. Accurate bookkeeping and realistic expense projections keep cash-flow estimates honest.

• Net cash remaining after operating expenses and debt service
• Can be positive or negative
• Sensitive to vacancy and unexpected costs
• Key metric for income-focused investors