How Much Cash Flow Should a Rental Property Make?
Last reviewed August 2026
The short answer: a common target is $100–$200 per unit per month after every expense and reserve. But the dollar amount alone is misleading — what matters more is cash-on-cash return, where 8–12% is widely considered good. $150/month on a $150,000 property is excellent; the same $150 on an $800,000 one is not.
"Good cash flow" is one of the most-asked questions in real estate, and the honest answer is "it depends on how much you invested to get it." Here's how to think about it properly.
The $100–$200 rule of thumb
Many investors aim for at least $100–$200 per unit per month after all expenses — including vacancy, maintenance, and a capital-expenditure reserve, not just rent minus the mortgage. It's a useful floor because it leaves a cushion: enough that one surprise doesn't push the property into the red. A true cash-flow figure only counts once those reserves are subtracted — see the full cash-flow waterfall.
Why the percentage matters more
A dollar target ignores the size of your investment. That's why experienced investors lean on cash-on-cash return — annual cash flow divided by the cash you put in. A property returning $1,800/year on $18,000 invested (a 10% cash-on-cash return) is doing far more for you than the same $1,800 on $60,000 invested (3%). Many buy-and-hold investors target 8–12%. Check yours with the ROI calculator.
What changes the right target
Your target should flex with a few things: the price point (higher-priced properties often cash flow less in dollars but may appreciate more), your market (cash-flow markets vs. appreciation markets), and your strategy (income now vs. wealth later). In pricey coastal markets, investors often accept thin cash flow for appreciation; in the Midwest and South, higher current cash flow is the norm. Match the number to your goal rather than a national average.
Whatever your target, keep an eye on the margin above break-even rent — that cushion is what carries you through a vacancy or a repair.
Frequently asked questions
How much cash flow should a rental property make?
A widely-cited target is $100–$200 per unit per month after every expense and reserve — so a duplex might aim for $200–$400. But the dollar figure alone is misleading: $150/month on a $150,000 property is a far better result than $150 on an $800,000 one. Pair the monthly number with cash-on-cash return, where 8–12% is often considered good.
Is $200 a month good cash flow for a rental?
It can be, depending on how much you invested to get it. $200/month is a solid per-unit target if your cash invested is modest, but weak if you tied up a large down payment. Convert it to a percentage — annual cash flow ÷ cash invested — and compare that cash-on-cash return to your target and your alternatives.
Why is cash-on-cash return better than a dollar amount?
Because it accounts for how much you invested. Two properties can both cash flow $150/month, but if one took $15,000 to buy and the other took $80,000, the first earns roughly five times the return on your money. The percentage keeps the comparison honest across different deals and price points.
What if a property has little or negative cash flow?
Thin or negative cash flow means the deal depends on appreciation and loan paydown to pay off — an appreciation bet, not an income investment. That can work in strong-growth markets, but it carries more risk because you're covering losses each month. Make sure it's a choice you're making deliberately, not a surprise.
How do I increase a rental's cash flow?
The biggest levers are price and financing — paying less or putting more down lowers the mortgage. After that: raise rent to market, cut vacancy with good tenants, self-manage if you can, appeal an inflated tax assessment, add income like parking or laundry, and shop insurance. Small improvements across several lines add up.
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