Property investment cash-flow calculator
Punch in any AU residential investment property and see what it actually costs you each week — gross and net rental yield, the full year-one tax position with negative gearing, and the wealth impact once you account for principal paydown. Capital growth is deliberately excluded; it's the biggest variable but the most speculative.
Property
Financing
Default 80% LVR. Higher LVR = LMI; not modelled here.
IO is common for investors; converts to P&I after 5 years with most lenders.
Expenses & allowances
Apartments only; $0 for houses.
Typical AU range 6–9%.
3% ≈ 1.5 weeks vacancy/year.
Long-run averages run ~1% p.a.
Get a quantity surveyor's report for accuracy. New builds: $5–15k+; established (post-2017 ATO rules): often $0–$3k.
Tax
Used to compute your marginal tax rate. Excludes the property's rental income.
Marginal rate (incl. Medicare): 39%.
Cash flow breakdown (annual)
- Gross annual rent
- $39,000
- Vacancy allowance
- −$1,170
- Effective rent
- $37,830
- Property management
- −$2,730
- Maintenance provision
- −$11,000
- Net operating income
- $19,600
- Annual mortgage payment
- −$63,313
- Pre-tax cash flow
- -$43,713
Tax position
- Effective rent
- $37,830
- Cash expenses (deductible)
- −$18,230
- Year-1 interest (deductible)
- −$52,506
- Depreciation (deductible)
- −$5,000
- Rental loss (offsets other income)
- -$37,906
- Tax refund at 39%
- $14,783
Year-1 wealth impact (excluding capital growth)
- After-tax cash flow
- -$28,929
- Principal paid down (P&I only)
- +$10,807
- Year-1 wealth change (cash + equity)
- -$18,123
Capital growth is deliberately not included — it's the biggest variable but also the most speculative. If you assume X% annual growth on a $1,100,000 property, that's $44,000–$77,000per year at 4–7% growth. Whether that's realistic for the suburb is the actual investment thesis question.
How to read these numbers
Gross yield vs net yield
Gross yield (annual rent ÷ price) is the headline number every listing quotes. It's misleading on its own — properties with the highest gross yields often have outsized expenses (high strata, heavy maintenance, fast-depreciating fixtures). Net yield (after operating expenses, before mortgage and tax) is the better gauge of a property's pure income-producing quality.
Pre-tax vs after-tax cash flow
Pre-tax cash flow is what hits your bank account each week — rent in, mortgage and expenses out. After-tax cash flow adds back the tax saving (if negatively geared) or subtracts the extra tax (if positively geared). Australian negative gearing lets you offset rental losses against your salary income at your marginal rate, so a $20,000 rental loss for someone on a 32% marginal rate creates roughly $6,400 of tax saving — the rental loss costs you $13,600 net, not $20,000.
Wealth impact = cash flow + principal paydown
Even with a negative weekly cash flow, you may be building wealth via principal paydown — every P&I mortgage payment converts a small slice of debt into equity. The calculator shows year-one principal paydown explicitly so you can see the full picture: a $30,000 negative-geared loss may be offset by $11,000 of principal paydown, reducing the “true” year-one wealth cost to $19,000.
Capital growth, when realised on sale, is the dominant variable in long-run AU property returns. We deliberately don't model it because (a) it's suburb-specific, (b) it requires speculative assumptions, and (c) the cash-flow and tax pieces are knowable today and the growth piece is the investment thesis your due diligence has to deliver.
What “positive geared” really means
In AU parlance, a property is positively geared when after-tax cash flow is positive — rent + tax position covers all expenses including mortgage. In current 2026 conditions (interest rates ~6.0–6.5%, residential gross yields ~3–5% in most metro areas), positive gearing is unusual without low LVR, very high yield, or both. Most metro Sydney/Melbourne purchases at standard 80% LVR are negatively geared.
What this calculator deliberately doesn't model
- Capital growth.The big one. See above — it's deliberately excluded so you can think about it separately.
- Capital gains tax on sale (50% CGT discount applies after 12 months for individuals; full tax for companies). Modelled in a future tool.
- State land taxon investment properties above each state's threshold. Material in NSW, VIC, QLD especially for investors with multiple holdings.
- Lender's Mortgage Insurance (LMI) if your LVR is above 80%. Premiums vary $5,000–$30,000+ and capitalise onto the loan.
- Building / contents insurance beyond what you bundle into the council/water/insurance line.
- Refinance / break costs. If you change lenders or restructure.
- SMSF, trust or company holding structures. The marginal-rate logic above assumes individual ownership. SMSF property has its own rules and restrictions.
- Rental income growth beyond year one. AU rents have grown ~5–8% p.a. in recent years; cash flow improves over time even before capital growth, but year-one is the tightest squeeze.
Methodology
- Yields: gross = annual rent ÷ price; net = (effective rent − cash expenses) ÷ price.
- Mortgage:standard amortising formula for P&I; interest-only is principal × annual rate. Year-one interest portion is computed by simulating the first 12 monthly payments rather than averaged — slightly more accurate for short-term cash flow analysis.
- Expenses: council/water/insurance is a flat annual amount you input; strata is separate (apartments only); management is % of rent; vacancy is % of rent; maintenance is % of property value.
- Depreciation:single user input. ATO 2017 changes mean second-hand residential properties (purchased post-9 May 2017) generally get no plant-and-equipment depreciation — only capital works. New builds can have $5,000–$15,000+ year-one deductions; established properties often $0–$3,000. A quantity surveyor's depreciation schedule (~$700) gives a binding number.
- Tax: marginal income tax rate plus 2% Medicare levy (above the standard threshold), applied to the rental loss or gain. Rental loss = effective rent − cash expenses − interest − depreciation. Principal repayments are not deductible.
- Year-1 wealth impact: after-tax cash flow + year-one principal paydown. Excludes capital growth, CGT on eventual sale, and rental growth in subsequent years.
Source: lib/property-investment.ts. ATO references: rental properties, capital works deductions.
Other tools to run alongside this one
Stamp duty (full purchase cost), the mortgage comparison-rate calculator (your loan), and the income tax calculator (your marginal rate) all interact with the property investment math.
Suburb-level data is next
The next property tool will overlay this calculator with median price, median rent and vacancy data per AU suburb. We'll email you when it ships.