The rental cash flow formula
Cash flow = Monthly rental income - All monthly expenses (mortgage, property tax, insurance, maintenance, vacancy provision, management costs). A positive cash flow means the property generates income after all costs. Target a minimum provision of 5% for vacancy and 5% for maintenance.
The complete cash flow calculation includes:
| Income | Expenses |
|---|---|
| Monthly rent | Mortgage payment |
| Property tax (monthly equivalent) | |
| Insurance | |
| Co-ownership charges | |
| Maintenance provision (5% of rent) | |
| Vacancy provision (5-10% of rent) | |
| Management costs (software or agency) |
Cash flow = Total income - Total expenses
Concrete calculation example
For an apartment in Namur purchased for 180,000 EUR:
| Element | Monthly amount |
|---|---|
| Rent received | 800 EUR |
| Mortgage payment (25 years, 3.5%) | -640 EUR |
| Property tax (monthly equivalent) | -85 EUR |
| Insurance | -25 EUR |
| Maintenance provision (5%) | -40 EUR |
| Vacancy provision (5%) | -40 EUR |
| Management software | -10 EUR |
| Monthly cash flow | -40 EUR |
This property has a slightly negative cash flow of -40 EUR/month but is building equity through mortgage repayment. After the mortgage is paid off, the cash flow becomes +600 EUR/month.
A slightly negative cash flow (under 100 EUR/month) is acceptable if the property builds equity and appreciates in value. Use our profitability simulator to model different scenarios including rent indexation over time.
Positive vs negative cash flow
Positive cash flow (self-financing property):
- The property pays for itself entirely
- Generates additional income for the investor
- More common in high-yield areas (Walloon cities)
- Requires significant down payment or low purchase price
Negative cash flow (requires monthly contribution):
- The investor supplements the shortfall each month
- Wealth is built through equity and appreciation
- More common in high-value areas (Brussels, Flanders)
- Risk if the investor’s income decreases
The ideal scenario depends on your investment strategy and financial situation.
Regional specifics
Brussels-Capital Region
Brussels properties typically have negative cash flows due to high purchase prices. The Ordinance of 27 July 2017 may add compliance costs for older properties.
Wallonia
Walloon properties, particularly in cities like Namur, Mons and Charleroi, often achieve positive cash flows. The Decree of 15 March 2018 does not significantly impact operating costs.
Flanders
Flemish properties fall between Brussels and Wallonia. Registration duties of 12% for investment properties impact the initial cost basis. The Flemish Housing Rental Decree of 9 November 2018 may require energy renovation costs.
Cash flow from rental properties is not directly taxed in Belgium (for private individuals). Rental income is taxed based on the indexed cadastral income, not actual rent received. Mortgage interest is deductible in certain conditions.