Cash flow is the real money that comes in or out of your account each month from a property. It’s not the same as yield, and mixing the two leads to bad decisions.
How it’s calculated
For each property and month:
Cash flow = Income - Recurring expenses - Mortgage payment - Other expenses- Income: rent received, deposit returns, tenant recharges, other.
- Recurring expenses: council tax (when applicable to the landlord), service charge, insurance, scheduled maintenance.
- Mortgage payment: the full payment (interest + principal repayment).
- Other: incidents, refurbishments, one-off works.
Why it’s not yield
The mortgage payment includes principal repayment — money that leaves your account but converts into equity (you’re reducing debt). That’s why a property can have negative cash flow and still be a good investment. See the full yield guide if you want to understand the difference.
Projected cash flow
On Pro and Portfolio plans, Livra projects cash flow 6 or 12 months ahead, considering:
- Upcoming mortgage payments.
- Recurring utilities at their real frequency.
- Contract end dates that may change.
- Council tax and other annual payments allocated to their month.
Recommended reading
- If cash flow is positive: your property is funding its own cost and leaving money in your account each month.
- If negative but small: you’re funding it; check if it’s compensated by principal paydown and appreciation (see Public calculator).
- If very negative: review utility prices, mortgage payment and rent level before making decisions.