Positive cash flow is what's left over each month after a rental's income covers all its costs. Add up everything the property costs you (the mortgage payment, property taxes, insurance, and property management if you use it), then compare that total to the rent coming in. If the rent is higher, the difference is your positive cash flow. A simple example: a property that costs $1,000 a month to own and rents for $1,200 cash flows $200 a month. If it only rented for $900 against the same $1,000 in costs, you'd be negative, paying out of pocket to hold it. One honest add-on that beginners skip: build in a cushion for vacancy and maintenance, because no rental stays occupied and repair-free forever. A property that breaks even on paper can turn slightly negative once you set aside reserves for the month it sits empty or the water heater that fails. Real cash flow is what survives after those realities, and rent minus the mortgage is only the starting point.