Cash Flow
Direct definition
The net income a rental property generates after operating expenses and debt service.
Written by the Vabasso Mortgage Editorial Team · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Plain-English explanation
Positive cash flow means rent covers all expenses — including the mortgage — with cash left over. Negative cash flow means you're feeding the property each month.
Why it matters
It measures a property's ability to sustain itself and grow your portfolio.
Where you may see it
- Rent roll
- Property income statement
- Underwriting conditions
A real-world example
Rent is $3,000; expenses are $900; mortgage is $1,700 — monthly cash flow is $400.
Educational and illustrative only
A common misunderstanding
Positive cash flow doesn't guarantee profitability overall — it doesn't factor in appreciation, taxes, or major future repairs.
Ask Vabasso AI
This glossary provides general educational information. Mortgage terminology, qualification methods, forms, timelines, fees, program rules, and legal meanings may vary by lender, investor, loan program, property, occupancy, state, and transaction. Definitions do not represent loan approval, legal advice, tax advice, or a commitment to lend.
- Author
- Vabasso Mortgage Editorial Team
- Reviewed by
- Vabasso Mortgage Licensed Advisory Team
- Last reviewed
- July 30, 2026