The single most common way a cash flow calculation goes wrong is not the rent side — it's an incomplete list of costs. Leave out land tax, understate repairs, or skip the management fee, and a property that looks comfortably positive on paper turns out to be negative once every real bill is counted. This guide lists every expense category that belongs in a proper cash flow calculation, grouped the same way the cash flow calculator groups its inputs, plus the costs that look related but don't belong there.
Ongoing costs of holding the property
Property management fees
A percentage of rent collected, typically 5–8.8% depending on the market, plus letting fees when a new tenant is placed. Applied to rent after vacancy, not the advertised figure.
Council rates and water rates
Fixed local charges that apply regardless of whether the property is tenanted.
Landlord and building insurance
Premiums covering the building, loss of rent and landlord-specific risks like malicious damage.
Strata or body corporate fees
Applies to units and townhouses in a managed scheme — often the single largest fixed cost after the loan.
Land tax
Where it applies in your state or country, calculated on the land value and often overlooked in quick estimates.
Repairs and maintenance
Should be budgeted as an ongoing annual allowance, not assumed at zero — hot water systems, appliances and general wear happen even on well-kept properties.
The loan
Interest
Always a cash flow cost, whether the loan is interest-only or principal and interest.
Principal repayments
Real cash out the door on a principal and interest loan — but building equity rather than disappearing, so worth tracking separately from interest.
Loan fees
Ongoing account-keeping fees, and one-off costs like refinancing or break fees in the year they are incurred.
Costs that don't belong in ongoing cash flow
Purchase costs (stamp duty, legal fees, buyer's agent fees)
One-off costs at acquisition. They matter for cash-on-cash return and total return, but not for an ongoing weekly or annual cash flow figure.
Capital improvements
Renovation and improvement spend adds to the property's cost base and depreciable value — it is not a running cost, and mixing it into cash flow understates the property's normal, ongoing performance.
Depreciation
A non-cash accounting deduction. It affects tax payable, not the cash actually moving in or out of your account, so it sits outside a pre-tax cash flow calculation.
Why the distinction between running costs and capital costs matters
Cash flow is meant to describe the property's normal, ongoing behaviour — what it costs and earns in a typical week. One-off purchase costs and capital improvements are real money, but they distort that picture if folded into the same figure. A renovation year will always look like a cash flow disaster if the reno spend is counted as a running cost; separating it out shows the property's true underlying cash flow both before and after the improvement.
The same logic applies to depreciation in the other direction. It reduces taxable income without any cash actually changing hands, so including it in a pre-tax cash flow figure would overstate how much money is really left in your account each week.
A quick completeness check
Before trusting a cash flow number, check it against six categories: rent after vacancy, management fee, rates and water, insurance, strata or land tax where applicable, repairs and maintenance, and the loan repayment. If any of those six is missing or set to zero without a specific reason, the figure is understating your real cost of holding the property.
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