How much cash flow should a rental property make?

A common target is $100–$200 per unit, per month in true cash flow — but only if it's counted after setting aside money for vacancy and big repairs. The honest answer depends on your market, financing, and goals, and the rule of thumb hides a trap most new investors fall into.

The per-door rule of thumb

Many buy-and-hold investors aim for $100–$200 per door per month. A single-family rental clearing $150/mo, a duplex clearing $300/mo, a fourplex clearing $600/mo. Some push for $300+ per door in cheaper markets; in expensive coastal markets, investors often accept near-breakeven cash flow and bet on appreciation instead. It's a guide, not a law.

The trap: "cash flow" before reserves isn't cash flow

The number that fools people is rent minus mortgage minus the obvious bills. Real cash flow is what's left after you also set aside for the costs that don't hit every month but always come:

A property "cash-flowing $250/mo" on paper can actually lose money once a $6,000 roof or two months vacant hits. Reserve for it up front and judge the deal on what's truly left.

Worked example

A $200,000 single-family rents for $2,100/mo. After vacancy, taxes, insurance, management, maintenance, and a capex reserve, its NOI is about $16,031/yr. With 20% down at 7% over 30 years, the mortgage is $12,774/yr.

That's above the $100–$200 per-door target for a single unit — a healthy deal — and it already includes maintenance and capex reserves, so the number is real, not phantom.

Cash flow is only half the picture

• Cash-on-cash return tells you the cash flow relative to what you invested — $3,000/yr on $30k invested (10%) is very different from $3,000/yr on $100k. See the cash-on-cash guide.
• DSCR tells you whether the rent covers the loan — and whether a lender will finance it. See what is DSCR.
• Total return also includes loan paydown and appreciation, which often dwarf year-one cash flow over a long hold.