1. What Is The Bigger Pockets Property Calculator?

The Bigger Pockets Property Calculator helps real estate investors calculate the monthly cash flow of rental properties by considering all major income and expense factors.

2. How Does The Calculator Work?

The calculator uses the cash flow formula:

Where:

• Rental Income — Total monthly rental revenue
• Mortgage — Monthly mortgage payment
• Taxes — Monthly property taxes
• Insurance — Monthly insurance premiums
• Repairs — Monthly repair and maintenance budget
• Vacancy — Percentage of rental income set aside for vacancies
• Management — Percentage of rental income for property management

Explanation: This comprehensive formula accounts for all major expenses to provide an accurate picture of monthly cash flow.

3. Importance Of Cash Flow Calculation

Details: Accurate cash flow calculation is essential for real estate investors to evaluate property profitability, make informed investment decisions, and ensure positive monthly returns.

4. Using The Calculator

Tips: Enter all monetary values in dollars per month. Enter vacancy and management as percentages. All values must be non-negative numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is considered good cash flow for a rental property?
A: While it varies by market, many investors aim for $100-200 per door in positive monthly cash flow after all expenses.

Q2: How should I estimate repair costs?
A: A common rule is to budget 1% of the property value annually for repairs, divided by 12 for monthly amount.

Q3: What vacancy rate should I use?
A: Typical vacancy rates range from 5-10% depending on location and property type. Research local market conditions.

Q4: Is property management necessary?
A: Management fees (typically 8-12% of rent) should be included even if self-managing to account for your time's value.

Q5: Should I include principal payment in cash flow?
A: Cash flow calculations typically include the entire mortgage payment (principal + interest) as an expense.