In Belgium

Cash flow measures the actual money flowing in and out of a property investment each month or year. Unlike net yield, it includes the mortgage repayment, making it the most practical day-to-day indicator.

Positive cash flow: rental income exceeds all costs including mortgage. The property “pays for itself” and generates a surplus.

Negative cash flow: costs exceed rental income. The owner must top up from personal income each month. This is common in early years with high mortgage repayments.

How it works

Formula: Monthly cash flow = Rent received - (Mortgage repayment + Property tax/12 + Insurance/12 + Maintenance provision + Management fees)

Example. Apartment rented at 850 EUR/month. Monthly costs: mortgage 550 EUR + property tax 75 EUR + insurance 25 EUR + maintenance 40 EUR + management 0 EUR = 690 EUR. Monthly cash flow: 850 - 690 = +160 EUR.

i
Good to know
A negative cash flow is not necessarily a bad investment. If the property appreciates in value and the mortgage is being paid down by the tenant’s rent, the owner is building wealth — they just need the monthly income to cover the shortfall.

Practical example

Caroline buys an apartment for 250,000 EUR with a 200,000 EUR mortgage (25 years, 3.5%). Monthly repayment: 1,001 EUR. Rent: 950 EUR. After all costs (1,150 EUR/month), her cash flow is -200 EUR/month. However, the property appreciates by 2% annually (5,000 EUR) and 700 EUR/month of her mortgage repayment is capital (not interest). Her net wealth increase: 5,000 + 8,400 = 13,400 EUR/year, despite the negative cash flow.