Typically, when one speaks of a property’s “cash flow”, they are NOT including tax benefits from depreciation.
However, they may or may not be including financial costs (PITI)… you should ask for clarification on a case-by-case basis. As a general rule, I think most people use the generic term “cash flow” to mean AFTER financial costs.
Hope this helps. I also have a free real estate financial analysis and valuation model at www.slatefinancial.com if you are interested.
Andy
Posted by Brian (NoCA) on July 17, 2003 at 15:59:06:
Typically, what does one mean when they speak of “cash flow” for a rental unit? My real question is does this include depreciation and deduction for loan interest?
For example, If I rent a house for $1000/mo and my loan payment is $1000/mo PITI (assume no other expenses), is my cash flow zero by definition or some positive number from the tax breaks and depreciation?