Cash flow is the money a rental actually puts in — or takes out of — your pocket. Start with the rent you collect, subtract operating expenses, then subtract debt service (your mortgage principal and interest). What’s left is cash flow: positive means the property pays you, negative means you feed it each month.
Cash flow differs from NOI, which stops before the mortgage, and from taxable income, which factors in non-cash items like depreciation. Setting aside reserves for vacancy, repairs, and capital expenses is what separates durable cash flow from a number that looks healthy until the first big bill lands.