How much cash flow should your rentals actually be making?

You've probably heard $100 per door, 10% cash or cash return, or just as much as possible. But what do those numbers really mean? And are they realistic in 2025? In this episode, I'll show you how to measure cash flow, what enough actually looks like, and how to adjust for today's market. Hey there, I'm Chad Carson. You can also call me Coach Carson, and on this channel, I teach you how to use real estate investing to achieve financial freedom so you can spend your time doing more of what matters. Now, towards the end of the video, I'm going to share how much cash flow I actually need to make a good deal right now in 2025. But before we could talk about how much cash flow is enough, we've got to get on the same page about how to actually measure cash flow.

And I'm going to make this really simple. You can think about measuring cash flow in two different

ways, the amount of cash flow and the return on your cash flow. And then with each of those,

you can also think about the amount of cash flow with no mortgage or the amount of cash flow

with a mortgage. Or you can think about the return on your cash flow without a mortgage and the return on the cash flow with a mortgage. So there's four different formulas. And I'll explain each of these really simply. Then I'm going to give you an example to show you how it works in the real world. So if you want to know the amount of cash flow and you have no mortgage, there's a formula called net operating income, also known as

NOI, which I think is the most important formula to be able to figure out in the real estate investing

business. And it really simply is this. You just have to take the rent that you can collect on a property

and you subtract all of your operating expenses. So this is all of your expenses except for your

mortgage because we're assuming right now that you have no mortgage on the property. So this is all of your expenses except for your mortgage, because we're

assuming right now that you have no mortgage on the property. So operating expenses include

your management fees, your taxes, your insurance, your maintenance, any capital expenses,

vacancy expenses, things like utilities if you happen to pay the utilities for your tenants.

So everything that would come off of the bottom line, all of your expenses, what's left over is your NOI or your net operating income.

Now that's without a mortgage, but if you want under the amount of cash flow with a mortgage, it's just one more step.

You take the net operating income that we just figured out and you subtract your mortgage cost.

So typically you can figure that out with an amort you subtract your mortgage cost. So typically,

you can figure that out with an amortization or a mortgage calculator. That's the principle and

interest that you'll pay on your mortgage. So the NOI minus your mortgage cost. What's left over

is your net income after financing. And most people just call this your cash flow. So there's

two different ways to figure out the amount of cash flow. But many investors also want to know the return on our cash flow. We want to know how much are we going to get back in the first year based on how much money we put into the property. It's a good thing to know, right? So there's two different ways to think about that as well. Without a mortgage, you figure out a formula called the unleveraged yield. This is very

similar to a cap rate. It's basically the same formula. You might have heard of a cap rate in real

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