How to Calculate Cash Flow on a Rental Property

December 12, 2025

AI Summary

5 min read

🎙️ The Voices & The Context

The Format: This episode features a casual chat format where the hosts engage in a practical discussion on cash flow analysis in real estate investing. The atmosphere is informative and supportive, making complex topics accessible for listeners.
The Key Players:
- Dave Meyer: A data analyst and head of real estate investing at Bigger Pockets, known for his expertise in real estate metrics.
- Ashley Kerr: Co-host of the Bigger Pockets Real Estate Rookie Podcast, bringing a fresh perspective as a newer investor and discussing her experiences with cash flow calculations.

🗝️ Key Themes & Topics

Understanding Cash Flow: The hosts emphasize the importance of correctly calculating cash flow by including all relevant expenses, not just mortgage payments and rental income.
Fixed vs. Variable Expenses: A detailed discussion on the distinction between these two types of expenses helps clarify cash flow calculations.
Analyzing Real Estate Deals: The hosts walk listeners through a live deal analysis, showcasing the importance of thorough underwriting and considering potential variable expenses.
Mindset for Investment: The conversation explores the mindset necessary for real estate investing, including being realistic about cash flow expectations and long-term growth.

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What you'll learn

1 (00:00) **Are You Calculating Cash Flow Correctly?**
2 (00:30) **🎙️ Introduction: Dave Meyer & Ashley Kerr**
3 (01:53) **What is Cash Flow?**
4 (02:58) **Understanding Fixed and Variable Expenses**
5 (03:39) **Incorporating Variable Expenses into Underwriting**
6 (04:36) **Factoring in Vacancy and Turnover**
7 (05:54) **Mindset Shift on Cash Flow Calculations**

+ Full timestamped outline available in the app

Show Notes

Before you buy your first (or next) real estate deal, you need to know one thing—how to calculate cash flow on a rental property.

The problem? 99% of investors do this wrong and get burned as a result. That’s why after buying dozens of rental properties, we’ve come up with arguably the most accurate way to calculate real estate cash flow, and today, we’re showing you how to do it, too.

Joining us is Ashley Kehr from the Real Estate Rookie podcast, who’s been buying rentals routinely for over ten years now. We’ll use the BiggerPockets Rental Property Calculator (which you can try for free!) to run numbers on a real rental property Dave is looking to buy right now.

You’ll learn exactly how to estimate both fixed and variable expenses, how much emergency reserves to set aside, how to account for property management fees, vacancy, repairs, and more, plus what to do to instantly boost your potential cash flow before you buy!

In This Episode We Cover

How to calculate cash flow on any rental property before you submit an offer

The easiest way to increase your cash flow if it’s not hitting the mark

What a good deal looks like to Ashley and Dave (when they’d submit an offer)

How to estimate your expenses (accurately) so you get the most cash flow possible

How much cash flow should you be making in 2026?

And So Much More!