Rental cash flow is what is left each month once the rent has paid the mortgage and the running costs. Enter the rent, voids, costs and mortgage to see the first year’s cash flow, a year and a month. You can also estimate the Income Tax on the rental profit for the 2026 to 2027 tax year, at the rates for England, Wales and Northern Ireland or the Scottish rates, with the tax reduction for mortgage interest.
Rent, voids and agent’s fee
Enter the monthly rent. Voids and arrears are the share of the year’s rent you do not collect: one empty month a year is 8.333%. A letting agent’s fee is a share of the rent collected; include the VAT, so 12% plus VAT is 14.4.
Landlord’s costs
Enter yearly amounts: council tax if you pay it, service charge and ground rent, landlord insurance, repairs and other allowable costs such as gas safety certificates and accountancy fees. They all reduce your cash flow and your taxable profit.
Mortgage
With the amount, the interest rate and the term, the calculator works out the monthly payment of a repayment mortgage, or the interest of an interest-only one, and the interest and capital paid in the first year. Leave the amount empty for a cash purchase.
Tax on the rent
Choose where you pay Income Tax and enter your other income for the year, such as salary or pension. The rental profit is the rent collected less your costs, without the mortgage interest. Its tax is the tax on your total income less the tax on your other income, so the bands and the Personal Allowance are applied as HMRC would. Mortgage interest then gives a tax reduction of 20% of the lowest of the interest, the profit and your income above the Personal Allowance.
Rounding and reuse
Each yearly amount is rounded to the nearest penny, with halves rounded away from zero (0.5p becomes 1p and -0.5p becomes -1p); the monthly figure is the yearly one divided by 12 and rounded the same way. Copy the workings, export them as a CSV file or save them to Priostack.
Rent collected = monthly rent × 12 − voids and arrears
Cash flow before tax = rent collected − running costs − the year’s mortgage payments
Repayment mortgage payment = C × t ÷ (1 − (1 + t)^−n), where t = yearly rate ÷ 12 and n = number of months
Rental profit = rent collected − running costs (mortgage interest is not deducted)
Tax = tax on (other income + profit) − tax on other income − 20% × the lowest of interest, profit and income above the Personal Allowance
Cash flow after tax = cash flow before tax − tax
Example: a flat let at £1,200 a month on an interest-only mortgage
Rent £1,200 a month, 4% voids, a 12% agent’s fee including VAT, £300 of insurance, £1,000 of repairs and £400 of other costs, and a £180,000 interest-only mortgage at 4.75% over 25 years. The rent collected is £13,824.00, the running costs £3,358.88 and the mortgage £712.50 a month, £8,550.00 a year. Cash flow before tax is £1,915.12 a year, or £159.59 a month. With £40,000 of other income in England, the rental profit of £10,465.12 adds £2,132.05 of Income Tax, less £1,710.00 of finance cost relief: £422.05 of tax, leaving £124.42 a month. With £60,000 of other income, the profit falls in the higher rate band, the tax is £2,476.05 and the cash flow becomes -£46.74 a month.
