How Does RealixData Calculate Cash Flow? The 7 Expense Categories Explained

Cash flow is the single most important number in rental real estate. It's what separates a property that makes you money every month from one that drains your bank account. Yet most beginners either skip the calculation entirely or use oversimplified math that misses major expenses. Here's exactly how RealixData calculates it — and how you can do it yourself.

The Cash Flow Formula

At its core, cash flow is simple:

The trick is in what counts as "total monthly expenses." Most people only think about the mortgage payment. But real investors account for seven distinct cost categories.

Step 1: Gross Rental Income

This is what the property earns before any expenses. RealixData pulls rental estimates from Zillow, cross-referenced with Zillow Rent Zestimates and local MLS data. We look at comparable properties within the same ZIP code — same bedroom count, similar square footage, similar condition.

For multi-family properties, we calculate per-unit rent and multiply by the number of units. A duplex renting each side for $1,200/month = $2,400 gross monthly income.

Step 2: The 7 Expense Categories

1. Mortgage Payment (P&I)

Calculated using the standard amortization formula with your purchase price, down payment percentage, interest rate, and loan term. RealixData defaults to current 30-year rates from FRED (Federal Reserve Economic Data) but lets you customize all parameters.

2. Property Taxes

We pull actual tax data from county records when available. When not, we use state-level effective tax rates. Texas properties pay ~1.8% of assessed value annually. Florida is ~0.86%. New Jersey can exceed 2.4%. This single line item can make or break cash flow.

3. Insurance

Estimated based on property value and location. Coastal Florida properties cost significantly more to insure than inland Georgia properties. We use state-level averages as a baseline: roughly $1,200-$3,500/year depending on the market.

4. Property Management (8-10%)

Even if you plan to self-manage, smart investors include this cost. Why? Because it represents the true return on the property, not your labor. Industry standard is 8-10% of gross rent. RealixData defaults to 8% but you can adjust it.

5. Maintenance & Repairs (5-10%)

Roofs leak. HVAC units break. Toilets clog. Budget 5-10% of gross rent for ongoing maintenance. Older properties lean toward 10%. Newer construction can get away with 5%. We default to 5% in our calculations.

6. Vacancy Rate (5-8%)

No property stays rented 100% of the time. Between tenant turnovers, you'll have empty months. We use local vacancy rate data — markets like Tampa run around 5%, while some Midwest cities can hit 8-10%.

7. HOA / Condo Fees

When applicable, HOA fees are included. These can range from $50/month for a basic neighborhood to $500+/month for condos with amenities. This is often the hidden expense that kills condo cash flow.

A Real Example

$134/month might not sound exciting, but that's $1,608/year in passive income — plus your tenant is paying down your mortgage, and the property is (likely) appreciating. The real wealth is built over time.

What Makes RealixData Different

Most calculators use national averages. We don't. Our calculations use state and county-level data for tax rates, insurance costs, and vacancy rates. A property in Houston, TX gets different expense assumptions than one in Columbus, OH — because the real costs are different.

We also let you customize every parameter. Change the down payment, interest rate, management fee, or vacancy assumption — and watch the cash flow update in real time.