Insight
The proper definition of cash flow is taking total income (rent) and subtracting all expenses, including the mortgage, taxes, insurance, repairs, maintenance, vacancy, and turnover costs.
How Much Cash Flow Should Your Rentals Make?
Summary
This article from BiggerPockets discusses how to calculate cash flow and determine a good cash flow target for your rental properties in the current market. The author suggests aiming for a 7% cash on cash return after stabilization to ensure a profitable investment. Hosts should use cash on cash return as their main metric and focus on the power of compounding for long-term financial success.
Key takeaway