PLAN FOR THE FUTURE

CASH FLOW ANALYSIS

Run up to 30-year operational & financial projections, with custom drivers and parameters

Don’t purchase a rental property without running the numbers first. With our rental property analysis spreadsheet, you can generate detailed forecasts and calculate your rental income, operating expenses and property’s cash flow over the life of your investment in less than 2 minutes.

Cash Flow Analysis & Projections

Forecast How Much Cash Flow Your Property Can Generate

See The Potential Over the Full Life of Your Investment

Don’t limit yourself to basic financial indicators that don’t fully reflect the potential of your investment over time. Forecast your cash flow and calculate your total rate of return!

30-year forecasts Icon

30-year Forecasts

Estimate your property’s performance over time

Custom Drivers

Adjust all of your parameters on a year by year basis for full flexibility

Profitability Analysis

Automatically calculate Cash on Cash Return, Cap Rate, IRR & more

Rehab by Area

Exit Optimization

Identify the best time to sell your property to maximize return

Frequently Asked Questions

In real estate investing, cash flow analysis basically refers to the process of estimating the cash inflows (rental income) and outflows (operating expenses, debt service payments, taxes and maintenance costs) of your property.

A cash flow analysis aims to determine the net cash flow generated by your property over a specific period (usually on a monthly basis or annual basis). The primary goal is to assess the ability to generate positive cash flow and, from there, calculate financial indicators to estimate your return on investment.

Running a Cash Flow Analysis for your investment lets you add another dimension to your analysis: time. Most financial indicators used by real estate investors (Cash on Cash Return, Cap Rate, etc.) look at an investment at a particular point in time and fail to identify its potential over time. Other metrics, such as the Internal Rate of Return, offer a much more comprehensive way of estimating return. Being able to calculate these ratios is essential to become a successful investor. Most calculators online are not capable of calculating them but fortunately, our rental property analysis spreadsheet is

In real estate investing, different metrics serve different purposes, and each has its own strengths and limitations. While cap rate and cash on cash return are commonly used metrics for assessing the profitability of real estate investments, the Internal Rate of Return (IRR) offers a more comprehensive and nuanced analysis.

Accounts for Time Value of Money: IRR considers the time value of money by discounting future cash flows back to their present value. This means that cash flows received in the future are worth less than cash flows received today due to factors like inflation and the opportunity cost of capital. Cap rate and cash on cash return, on the other hand, do not explicitly account for the timing of cash flows.

Incorporates Financing Costs: IRR takes into account all costs associated with the investment, such as loan interest payments and the initial investment required. This is particularly important in real estate, where leverage is commonly used to amplify returns. Cap rate and cash on cash return do not consider financing costs, which can provide a distorted view of the investment’s profitability, especially when leverage is involved.

Handles Complex Cash Flow Structures: IRR can handle complex cash flow structures, including irregular cash flows and multiple investment phases. This makes it suitable for analyzing real estate investments with varying cash flow patterns, such as development projects or properties with renovation phases. Cap rate and cash on cash return are simpler metrics that do not accommodate such complexities.

Accounts for Reinvestment Rate: IRR implicitly accounts for the reinvestment rate of cash flows, assuming that cash flows are reinvested at the same rate as the IRR itself. This is more realistic than assuming a fixed reinvestment rate, as cap rate and cash on cash return typically do.

Our Cash Flow Analysis tool is part of our Rental Property Analysis Spreadsheet which will help you review rental properties and buy & hold investments like other experts in the field.

Download Your Free Rental Property Cash Flow Analysis Tool

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