Real estate cash flow is the difference between the rental income generated by a property and the costs associated with this investment. In other words, real estate cash flow measures the profitability of a real estate investment by taking into account the different financial flows linked to this type of investment.
To calculate the real estate cash flow of a property, it is first necessary to determine the rental income generated by the property, that is to say the amount of rent received by the owner. You must then subtract the various charges related to the investment, such as management fees, property taxes, insurance, maintenance work, etc. The result obtained is the real estate cash flow of the property.
Real estate cash flow can be positive or negative. If the cash flow is positive, this means that the rental income is higher than the expenses related to the investment, which allows the owner to generate a profit. If the cash flow is negative, this means that the charges are higher than the rental income, which results in a loss for the owner.
Real estate cash flow is an important indicator for assessing the profitability of a real estate investment. It helps to know if the investment is profitable or not, and to make informed decisions in terms of investment. However, it is important to take into account other factors, such as economic conditions, changes in interest rates, etc. to correctly assess the profitability of a real estate investment.
