calculating cashflow - is this correct

[Sam Alex]

Hi,

I've been trying to calculate the cash flow on my rental (actually my previous residence but had to rent out as i couldn't sell so not really planned), but have found it a little overwhelming. Could someone review let me know if i'm on the right track? (Background: i am evaluating whether to keep as rental or sell as i will have to pay capital gains if i keep it after August - when my capital gains exclusion expires)

Cash Flow = Income - Expenses

Expenses = Mortgage, Taxes, Insurance, Maintenance, Fees (e.g. HOA), vacancy ...

My monthly cash flow after expenses amounts to approx. $800. How do i use this number to evaluate the property ?

The other calculation i came across was Cash on Cash Return

Cash on Cash Return = Annual Cash Flow / Total Investment

Is the total investment my equity ? I bought for around 370K and owe 230K so have around 140K , using that:

Cash on Cash Return = (800 * 12) / 140,000

= 9600 / 140000

= 6.85%

Is this the right way to calculate? I'm not sure how to evaluate these numbers.

reference: https://www.biggerpockets.com/renewsblog/2014/06/1...

-Thanks