What is the cash flow of a property?
Rental yield and return on equity describe the long-term economics of a property — but in everyday life a different figure decides whether an investment property is sustainable: the monthly cash flow. It shows what is left of the rent once all costs are paid — or how much you top up out of your own pocket each month.
Cash Flow Calculator
Tax note: Non-binding guidance, without warranty – not a substitute for tax advice.
What the cash-flow calculator shows
Cash flow is the simplest and most direct metric for investors:
Cash flow = net cold rent − loan instalment − service charge − maintenance − management
A positive cash flow means: the property throws off liquidity each month — the tenant pays more than the property costs. A negative cash flow means: you top up a personal contribution each month. Both can make economic sense — it depends on the relationship to long-term wealth-building.
The calculator gives you this figure immediately — without annual projections, without assumptions about price development, without tax effects. Just the hard monthly numbers.
Positive cash flow: possible, but not a given in Dresden
In very good Dresden locations (Blasewitz, Neustadt, Striesen) with price multiples of 22–25x and current interest rates of 3.5–4 percent, a positive cash flow with standard financing (20–25 percent equity) is generally not achievable. The loan instalment exceeds the rental income.
In mid-range and peripheral locations (Löbtau, Pieschen, Gorbitz, Prohlis) with multiples of 14–18x, the picture is different: here, with sufficient equity and a moderate service charge, cash flows of +50 to +300 € per month can arise.
As a guide:
| Price multiple | Financing (25 % equity, 3.75 % interest + 2 % repayment) | Typical cash flow |
|---|---|---|
| 15x (peripheral location) | Instalment approx. 5.6 % of purchase price p.a. | often positive |
| 18x (mid-range location) | Instalment approx. 5.6 % of purchase price p.a. | around zero |
| 22x (good location) | Instalment approx. 5.6 % of purchase price p.a. | negative (−100 to −400 €) |
| 25x (very good location) | Instalment approx. 5.6 % of purchase price p.a. | clearly negative |
Negative cash flow: when it is acceptable anyway
Many successful Dresden property investors carry a monthly contribution of 100–300 €. That sounds like a loss — but it is a different way of doing the maths:
- The repayment is not a loss but wealth-building: every euro of repayment increases your equity share.
- The value appreciation (historically 2–5 percent p.a. in Dresden) exceeds the contribution in many years.
- For tax purposes, interest costs, depreciation (2 percent p.a. on the building share) and management costs are deductible as income-related expenses — which lowers the actual after-tax contribution.
The decisive question is not "Is the cash flow positive?" but: "Is the monthly contribution sustainable over the long term — and does the wealth-building justify this contribution?"
What belongs in the calculation
For a realistic cash-flow calculation, the following monthly items count:
Income:
- Net cold rent (the bare rent, excluding incidental costs)
Costs:
- Loan instalment (the annuity of interest + repayment) — the largest single item
- Non-recoverable service charge for a condominium: the part of the service charge that cannot be passed on to the tenant (the maintenance reserve of the owners' association, the fee of the association's manager)
- Maintenance reserve (your own reserve for the property, in addition to the association reserve): rule of thumb 1 €/sqm of living space per month
- Your own management costs: if you appoint a property manager (typically 4–8 percent of the net cold rent)
What does not belong in the cash-flow calculator: tax effects, depreciation, one-off costs for renovations — these affect overall profitability, not the running cash flow. For a look at the price multiple and the gross rental yield, a separate calculator is available.
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