Cash Flow Per Unit
It is how much spendable cash each rental door produces after the mortgage is paid.
Formal definition
Cash flow per unit equals net operating cash flow after debt service divided by the number of rental units in the portfolio or property.
Why it matters
Landlords live on cash flow per unit — appreciation does not pay this month's repairs.
Where you see it
- Property management owner packets
- BiggerPockets and investor forums
- Multifamily acquisition models
- Lender DSCR worksheets
- Portfolio performance reviews
Worked example
- Annual cash flow after debt: $24,000.
- Units: 4.
- Cash flow per unit = $24,000 ÷ 4 = $6,000/year ($500/month).
- Interpretation: Each unit averages $500/month after debt service.
How Business metrics calculates it
(Monthly rent − Monthly mortgage − Operating expenses ÷ 12) ÷ Units owned.
Where people fool themselves
Cash flow per unit that uses scheduled rent and ignores the vacant door averages a ghost into the building. Use collected rent.
Run it on your own numbers: the Residential Rental calculator.