Positive cash flow property generates more rent than carrying costs (mortgage + tax + maintenance + insurance), with surplus going to the owner monthly. Negative cash flow property loses money monthly but may still be profitable via capital appreciation. In 2026 Singapore, OCR-near-MRT properties at high yields are most likely positive cash flow; CCR luxury units are typically negative cash flow on leverage.
Cash flow formula
Monthly cash flow = Gross monthly rent − Mortgage instalment − Property tax (monthly) − Maintenance/sinking fund − Insurance − Vacancy buffer.
Worked example: positive cash flow property
| Item | Monthly |
|---|---|
| OCR 2BR condo, S$900k, 75% loan | — |
| Monthly rent | S$3,200 |
| Mortgage @ 1.3% / 30 yrs | −S$2,267 |
| Property tax (avg) | −S$100 |
| Maintenance | −S$300 |
| Insurance | −S$40 |
| Vacancy buffer (8% of rent) | −S$256 |
| Net monthly cash flow | +S$237 |
| Annual | +S$2,844 |
Worked example: negative cash flow property
| Item | Monthly |
|---|---|
| CCR 2BR condo, S$1,800k, 75% loan | — |
| Monthly rent | S$4,500 |
| Mortgage @ 1.3% / 30 yrs | −S$4,534 |
| Property tax + maintenance | −S$600 |
| Vacancy + insurance | −S$400 |
| Net monthly cash flow | −S$1,034 |
| Annual cash drain | −S$12,408 |
CCR's higher leverage burden and lower yield mean negative monthly cash flow. CCR investors typically rely on capital appreciation to compensate.
When each makes sense
- Positive cash flow: Yield investors, retirees, those wanting passive income
- Negative cash flow: Long-hold capital-appreciation investors, those with strong cash reserves
FAQ
Is negative cash flow always bad?
No. If capital appreciation exceeds the cash drain, the property is still profitable. But it requires ongoing capital injection.
How does mortgage tenure affect cash flow?
Longer tenure = lower monthly instalment = better cash flow but more total interest paid.
Can rental rate increases turn negative cash flow positive?
Yes — after 5-7 years of rent growth at 2-3% per annum, a previously-negative property often turns positive.