Cash Flow
The ultimate money path readout, Net Cash Flow shows cash remaining after paying all operating costs and debt services.
Net Cash Flow
Net Cash Flow is the total amount of money that flows into and out of the investment property after all expenses and debt duties have been met.
Formula
Cash Flow = Net Operating Income (NOI) - Annual Debt Service
*Note: Debt Service refers to the principal and interest payments on any property loans.*
What this tells you
Cash Flow indicates the amount of spendable money that goes directly into your pocket. Negative cash flow is a primary cause of deal churn, as owners must pay out-of-pocket to cover property operating losses and debt service.
How to improve it
- Refinance Loans: Seek lower interest rates or extend loan terms to reduce monthly debt payments.
- Implement Fee Structures: Log separate fees for parking, storage, pet permits, or laundry services.