Cash flow – is the amount of spendable income from a real estate investment; it is the amount of cash available after all expenses and debts have been paid. It is an indicator of overall financial health of a property. By striving to achieve the maximum cash flow for the owner, the real estate manager can benefit though rewards and recognition.
The cash flow statement illustrates some important financial measurements used in real estate. It shows that gross potential income (GPI) is adjusted to give effective gross income. (EGI), which is turn, is adjusted by operating expenses to produce net operating income (NOI). NOI is a commonly used measure of financial health in real estate. The residential site manager directly controls the NOI for the owner’s property and managing it is a core function of their job.