What does “positive cash flow” mean in property management?

In property management, "positive cash flow" refers to the situation where the income generated from a property exceeds the expenses associated with that property. This means that after accounting for all operational costs—including mortgage payments, property taxes, insurance, maintenance, and management fees—there is still money left over.

This excess income is crucial for property owners and managers, as it indicates financial health and the ability to reinvest in the property, save for future expenses, or distribute profits. Positive cash flow is a key metric for assessing the performance of an investment property, as it helps to ensure sustainability and profitability.

Other options do not accurately capture the essence of positive cash flow. For example, stating that sales from the property exceed expenses doesn’t specifically focus on the operational income versus expenses, which is vital in property management. Equating the amount of rent received to maintenance costs ignores other critical expenses and could still result in negative cash flow. Similarly, simply ensuring all expenses are paid does not reflect the overall financial balance required to achieve positive cash flow.