Rental Property Cash Flow Calculator UK 2026
Calculate your monthly and annual cash flow, cash-on-cash return, and break-even rent
Why Cash Flow Matters More Than Yield
Many property investors obsess over rental yield percentages, but cash flow is what actually matters for your financial health. A property with 7% yield can have negative cash flow, meaning you're paying money out of pocket each month.
The key insight: Yield is a return on the property value, but cash flow is what you can actually spend or reinvest. Always calculate your monthly cash flow after ALL expenses, including vacancy, maintenance, and mortgage payments.
Positive cash flow provides a buffer for unexpected repairs, interest rate rises, and periods without tenants. Aim for at least £100-£200/month profit after all costs.
Frequently Asked Questions
Why is cash flow more important than yield?
Yield tells you the return on the property value, but cash flow tells you how much money hits your bank account each month. A 7% yield property can have negative cash flow if the mortgage is high, meaning you have to top up monthly.
What is a good cash flow for a rental property?
Positive cash flow is essential. Many investors look for at least £100-£200/month profit after all expenses. Anything less leaves little buffer for repairs or void periods.
How do void periods affect cash flow?
Even one or two void weeks per year can significantly impact cash flow. Always budget for at least 2-4 weeks of vacancy annually when calculating your numbers.
What is cash-on-cash return?
Cash-on-cash return measures your annual pre-tax cash flow against the cash you originally invested (typically the deposit). It's expressed as a percentage and helps compare different investment opportunities.
How much should I budget for maintenance?
The 1% rule suggests budgeting 1% of the property value annually for maintenance. Alternatively, use 8-12% of rental income. Newer properties can use lower percentages, older properties should budget higher.
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