Rental cash flow

What is left after expenses

For a monthly overview, compare the rent you receive with payments for management, running costs, insurance and any other expenses you bear. If the flat is financed with a loan, count the full repayment, not just the interest. Part of the repayment does reduce the principal, but it leaves your account all the same.

Don’t treat advance payments for services as spare cash. Be just as careful with the tenant’s refundable security deposit (called “jistota” in Czech law). Both amounts land in your account, but they serve a different purpose from rental income.

A profitable flat can have negative monthly cash flow

An illustrative example: in a month you receive 25,000 Kč in rent, the owner’s regular expenses are 5,000 Kč and the loan repayment is 22,000 Kč. Pre-tax cash flow is minus 2,000 Kč. This doesn’t mean the property is losing value over the whole period. But you have to cover the cash shortfall from elsewhere.

Not all payments come monthly. Annual insurance, a larger repair or tax can temporarily turn otherwise positive cash flow negative. So alongside your bank statement, draw up an annual plan and keep a reserve. Tax depreciation, on the other hand, involves no payment from your account at all. That is why cash flow, the tax result and investment return differ without contradicting one another.