With any income property investment, two cash flows must be understood by the real estate investor and anyone else working with real estate investing: Cash Flow Before Tax, and Cash Flow After Tax.

Cash Flow Before Tax (CFBT)

Cash flow before tax is defined as net operating income (NOI) minus debt service (mortgage payment). Cash flow before tax is useful in defining the investor’s return on initial equity. This return is termed cash-on-cash return or broker’s net or, in appraisal, the equity dividend rate.

Cash Flow After Tax (CFAT)

Cash flow after tax is defined as cash flow before tax (CFBT) minus tax benefit (income) tax paid or plus income tax savings). This measure includes benefits derived from depreciation deductions and any other form of tax shelter that has the net effect of raising the rate of return on the investment.

ProAPOD® real estate investment software calculates both.

Our real estate investing software solution ProAPOD® Basic 6.0 calculates cash flow before tax.

Our real estate investment software solution ProAPOD® Premium 10.0 (includes full tax shelter) considers both, cash flow before tax and cash flow after tax.

Our real estate investor software solution ProAPOD® Investor software also considers both, cash flow before tax and cash flow after tax.