Cash Flow Math: What 'Positive Cash Flow' Really Means in 2026

By Solutions Property Management — Fri Jul 03 2026

Positive cash flow depends on what you count as an expense. Here's the honest version.

Every investor claims "positive cash flow." Almost none of them are running the number the same way. Here's the version that will keep you solvent.

**The wrong number**

Rent minus mortgage minus property tax. If that's positive, you're "cash flowing." This is the number the pitch decks use.

**The right number**

Rent minus everything, including the boring stuff:

• Mortgage (principal + interest)
• Property tax
• Insurance
• Utilities you pay
• Property management fee (whether or not you use one — value your time)
• Vacancy reserve (5-8% of rent)
• Maintenance reserve (5-10% of rent, higher on older buildings)
• Capital expenditure reserve (roof, furnace, windows — 5%)
• Landlord licensing / registration fees where applicable

Run those numbers and a lot of "cash flowing" properties turn out to be running at a loss the owner is subsidizing from their day job.

**Worked example**

$2,400/month rent on a Hamilton duplex unit:

• Mortgage: $1,400
• Property tax: $250
• Insurance: $90
• Utilities: $0 (tenant pays)
• Management @ 9%: $216
• Vacancy reserve @ 6%: $144
• Maintenance reserve @ 8%: $192
• CapEx reserve @ 5%: $120

Total expenses: $2,412 **Actual cash flow: -$12/month**

That's not "positive." That's break-even in a good year and negative in an average one.

**When it still makes sense**

Even at neutral cash flow, you're paying down principal (~$700/month of that mortgage payment) and getting appreciation. If the plan is 10+ years and you have the reserves to cover a bad year, break-even is fine. Just don't lie to yourself that it's cash flow.