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Although the real estate boom of recent years may be over, the persistently high demand, which exceeds supply, indicates a remarkable resilience of the residential real estate market. Prices remain strong, particularly in metropolitan regions. In the commercial real estate market, there are initial signs of recovery in areas such as logistics and retail, while the office market is facing challenges such as increasing vacancy rates.

Despite this stabilization and expected moderate price increases, landlords and investors in the German real estate sector are facing considerable challenges, particularly with regard to cash flow. The profitability of real estate investments is largely determined by key influencing factors.

The key cash flow challenges at a glance

Rising financing costs

Although the European Central Bank (ECB) has lowered its key interest rates, the cost of home loans rose sharply at the beginning of March 2025. Interest rates for ten-year loans are currently around 3.11% (as of January 2025). This significant increase compared to historical lows has a considerable impact on profitability, especially for projects with a high proportion of borrowed capital. Rising financing costs directly reduce cash flow.

Rising operating expenses

Maintenance costs for residential property rose by 68 % between 2010 and 2022. The general operating costs (ancillary costs) for tenants have also increased. In major cities such as Berlin in particular, operating costs for offices have risen by 47 % since 2018. These inflationary trends and specific market factors reduce the net operating result and thus the cash flow from real estate investments.

Influence of the tax environment

The basic rent forms the basis for income tax on rental income. Although landlords can claim deductible expenses (income-related expenses), the speculation tax on sales within ten years and the ongoing property tax represent burdens. Possible future reforms to real estate taxation could also affect profitability. Targeted tax optimization is therefore crucial.

Payment behavior of tenants

More than half of the German population lives in rented accommodation, and a significant proportion is burdened by high housing costs. The average rent burden ratio in 2022 was 27.8% of income. A high proportion of tenants with affordability problems can lead to an increased risk of rent arrears. Rent arrears can in turn lead directly to liquidity problems for landlords. Prompt processing of potential rent arrears is essential.

These challenges - from rising costs to rent losses - put pressure on the cash flow of real estate investments and require proactive management.

Why strategic Cash flow planning is more important than ever

In order to be successful in this environment, cash flow optimization strategies and a precise knowledge of relevant key performance indicators are essential. Solid cash flow management helps real estate companies to ensure financial stability and minimize risks. The aim is to always have sufficient financial resources to cover current expenses.

Given the complexity and volatile nature of real estate management, forward-looking Cash flow planning is fundamental. Reliable information on bank balances and future cash inflows and outflows is essential for this.

Cash position under control - with COMMITLY

The real estate industry is under enormous pressure. High construction costs, volatile markets and financing uncertainties make a clear view of the Cash position crucial. Those who actively manage their solvency create room for maneuver.

COMMITLY is the smart solution for digital liquidity management, developed by entrepreneurs for entrepreneurs. It combines bank accounts, payment plans and budgets on one platform for maximum transparency and planning security.

With COMMITLY you get:

• Daily synchronization of your bank accounts for an up-to-date liquidity status per property, company or project.
• Rolling Cash flow planning on a monthly, weekly or daily basis.
• The ability to keep an eye on several companies and projects - ideal for complex real estate structures.
• Functions for scenario planning to simulate various market developments.
• The preparation of forecast reports, static plans and variance analyses, which are also relevant for communication with banks.

Professional cash flow management, supported by suitable software, creates the necessary transparency to identify bottlenecks at an early stage and make well-founded decisions.

Here you can find out more about calculating the cash flow for real estate and optimization options.

Find out how strategic Cash flow planning actually works in the real estate industry.

Discover which reports banks want to see from your cash flow planning and how you can strengthen the confidence of financing partners.

You can also read about what determines the price when selling real estate - relevant for income forecasts and investment valuations.

If you want to successfully manage real estate projects today, you need more than just a gut feeling. With COMMITLY, Cash flow planning becomes a strategic advantage.