CalculateRealEstateROI

Cash Flow

What's the difference between cash flow and cap rate?

Cash flow is dollars per month; cap rate is unleveraged yield % at purchase.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Direct answer

Cash flow is dollars per month; cap rate is unleveraged yield % at purchase.

Expanded explanation

Cap rate ignores financing entirely and answers 'what yield does this asset produce?' Cash flow tells you what hits your bank account monthly after debt and reserves.

Examples

  • $200k @ 6% cap = $12k NOI; with 75% LTV @ 7% → ~$5k cash flow.

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