In real estate, what does "cash flow" refer to?

Cash flow in real estate refers to the amount of incoming cash after all expenses have been accounted for. This includes the rental income generated from the property minus the operating expenses, such as maintenance costs, property management fees, utilities, and property taxes. A positive cash flow indicates that a property is generating more money than it costs to operate, making it an attractive investment for real estate investors. This metric is critical for assessing the financial health and profitability of a rental property, as it represents the actual cash available to the investor after covering all costs associated with the property.

Understanding cash flow helps investors gauge their potential return on investment and make informed decisions about property management, financing, and overall investment strategy.