Definition: Cash flow measures cash coming in minus cash going out over a period. For a basic income-property problem with no other outlays specified, before-tax cash flow equals NOI minus debt service.
Example
Annual NOI is $50,000 and annual debt service is $32,000. With no other cash outlays specified, before-tax cash flow is $18,000.
Keep the distinction clear
Check what the problem includes. Capital expenditures and other cash outlays can reduce cash flow, while income taxes distinguish before-tax from after-tax cash flow. NOI is not the same as cash left after mortgage payments.
Related terms
Net Operating Income (NOI) · Annual Debt Service · Income Approach
Keep studying
Income Approach: NOI, Cap Rate, Property Value, and Cash-on-Cash Return
References: OCC: Commercial Real Estate Lending handbook
Pronunciation (US): KASH FLOH (capitals show stress)
Pronunciation reference: Merriam-Webster
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