For real estate investors in Germany, cash flow is one of the most important numbers to watch. It shows how much money your property actually makes after paying all expenses. Whether you’re new to investing or have been doing it for years, knowing your cash flow helps you build lasting wealth. In this post, we’ll explain what cash flow is, why it matters, and how you can track and improve it using tools like Immojourney’s Asset Manager.
What Is Cash Flow in Real Estate?
Cash flow is the money left over after you pay all costs related to your rental property. These costs include things like:
- Operating expenses (maintenance, utilities, insurance)
- Mortgage payments (loan principal and interest)
- Other fees
You calculate cash flow by subtracting these costs from your rental income.
- If you have positive cash flow, you earn more than you spend.
- If you have negative cash flow, you spend more than you earn.
Cash flow is the foundation of a successful real estate investment. It helps you manage properties, grow your portfolio, and work towards financial freedom.
Why Is Cash Flow Important?
- Keeps your portfolio stable: Positive cash flow covers unexpected repairs or vacancies without needing extra money from outside.
- Helps you grow: Steady cash flow lets you buy more properties and build wealth faster.
- Reduces risks: Negative cash flow can drain your savings and force you to sell investments.
Focusing on cash flow puts you in control of your investments.
How to Calculate Cash Flow
Use this simple formula:
Cash Flow = Rental Income – (Operating Expenses + Mortgage Payments)
What you include:
- Rental Income: Rent and any fees paid by tenants.
- Operating Expenses: Property management, repairs, utilities, taxes, insurance, etc.
- Mortgage Payments: Loan repayments including interest and principal.
Example:
You earn €2,500 in rent each month. Your operating costs are €800, and your mortgage payment is €1,200.
Your cash flow = €2,500 – (€800 + €1,200) = €500
That €500 is your monthly profit.
Track Your Cash Flow with KPIs
To manage your cash flow well, track key numbers called KPIs (Key Performance Indicators):
- Gross Cash Flow: Total income before expenses.
- Net Cash Flow: Income after all expenses and loans.
- Cash-on-Cash Return: Percentage return based on your cash investment.
How Immojourney’s Asset Manager Helps
Immojourney puts all your KPIs into one easy-to-read dashboard. This helps you:
- See how your properties perform at a glance
- Spot trends and problems early
- Make smarter investment decisions
Conclusion
Cash flow is the most important metric for real estate success – especially in Germany. Understand it, calculate it, and watch it closely using KPIs. Tools like Immojourney’s Asset Manager make tracking and improving your cash flow simple.
Start managing your cash flow today and grow your real estate portfolio into a strong source of income.
Take control of your cash flow now — Sign Up with Immojourney!
