BiggerPockets Real Estate Podcast How Much Cash Flow Should Your Rentals Make?
27 snips
Jan 30, 2026 Clear definitions of true rental cash flow and which expenses to include. Why cash-on-cash return matters more than raw monthly dollars. The difference between day-one and stabilized cash flow and a 7% cash-on-cash target. Trade-offs between cash flow and appreciation and when lower returns are acceptable. A push for conservative, worst-case underwriting and practical rules of thumb.
AI Snips
Chapters
Transcript
Episode notes
Target 7% Cash-On-Cash By Stabilization
- Dave Meyer targets a 7% cash-on-cash return by year two for new purchases.
- That 7% guides whether a deal is worth pursuing in the 2026 market.
Calculate True Cash Flow Correctly
- Calculate cash flow as total rent minus all expenses including mortgage, taxes, insurance, repairs, vacancy, and turnover.
- Do not treat cash flow as rent minus mortgage only because that omits real operating costs.
Use Cash-On-Cash To Measure Efficiency
- Use cash-on-cash return (annual cash flow divided by cash invested) to measure efficiency, not raw monthly dollars.
- Compare returns per dollar invested to decide which deals best use limited capital.