Investment Property Calculator Australia — Cashflow, Negative Gearing, Depreciation, 10-Year Projection

Investment property is the most popular wealth-building asset in Australia outside super — but it's also the asset where the maths is least transparent at the point of purchase. Gross yield is easy to quote. Net cashflow after tax is much harder to estimate. This calculator combines four engines in one flow: rental yield, weekly cashflow, negative gearing tax position, and a 10-year projection of value, equity, and cumulative cashflow.

What this calculator does

Three tabs from a single input form:

1. Cashflow — gross yield, net yield, weekly pre-tax position, with a breakdown of effective rent, loan repayments (interest vs principal), and holding costs
2. Tax — estimated annual depreciation, taxable loss, tax saving at your marginal rate, and after-tax weekly position
3. Projection — year-by-year property value, weekly cashflow, cumulative cashflow, and equity over the assumed growth horizon (default 10 years)

The three tabs share the same inputs, so changing one variable (e.g. rate up 1%, weekly rent up $50) updates all three views.

How investment property cashflow actually works

The full equation for weekly cashflow after tax on an Australian investment property is:

Weekly cashflow (after tax) =
   weekly rent
 − vacancy adjustment
 − weekly loan repayment
 − weekly holding costs
 + (tax saving from negative gearing loss ÷ 52)

The fifth line — the tax saving — is what makes Australian investment property attractive to high earners. A property that costs you $200/week before tax might cost only $120/week after tax in the 37% bracket, because the loss reduces your salary's taxable income.

But the tax saving only matters if there's a loss to claim. A positively geared property (rent > costs) has no negative gearing benefit — the rent profit is added to your taxable income instead.

Yield: gross vs net

Two yields matter:

• Gross yield = (annual rent ÷ purchase price) × 100. Quoted by agents and listing sites. Ignores all costs.
• Net yield = ((annual rent − holding costs − vacancy) ÷ purchase price) × 100. The honest cost number. Usually 25–35% lower than gross.

A $700,000 property renting at $550/week:

• Gross yield = $28,600 ÷ $700,000 = 4.09%
• Holding costs (rates, insurance, strata, maintenance, mgmt fee): ~$8,000/year
• Vacancy: 2 weeks/year = $1,100
• Net yield = ($28,600 − $8,000 − $1,100) ÷ $700,000 = 2.79%

The gap between gross and net is what separates the brochure pitch from the actual investment.

What's a "good" yield in Australia?

Market	Typical gross yield
Sydney inner-city units	3.5–4.5%
Sydney inner-city houses	2.5–3.5%
Melbourne CBD units	3.5–5%
Brisbane / Adelaide	4.0–5.5%
Perth	4.5–6.5%
Regional towns	5–7%
Mining towns (cyclical)	6–10%

Higher yield generally means lower capital growth potential. The yield-vs-growth trade-off is the core decision in Australian property investing. Investors with high incomes and long horizons usually optimise for growth (accepting lower yield + negative gearing). Investors needing positive cashflow target the higher-yield regional and outer-metro markets.

Negative gearing — the tax mechanism

If your property's annual costs (interest + holding costs + depreciation) exceed the rent, you have a loss. That loss reduces your other taxable income at the ATO:

Annual loss = costs − rent
Tax refund = annual loss × marginal tax rate
After-tax cost = annual loss − tax refund

A $10,000 annual loss at different marginal brackets:

Marginal rate	Tax refund	After-tax cost
30% ($45k–$135k income)	$3,000	$7,000
37% ($135k–$190k income)	$3,700	$6,300
45% (income over $190k)	$4,500	$5,500

This is why negative gearing is most attractive to high-income earners — the same loss generates a bigger refund.

Depreciation — the silent deduction

Depreciation is a non-cash deduction on:

• Division 43 (capital works) — the building structure, at 2.5% per year for 40 years from construction (residential, post-15 Sep 1987)
• Division 40 (plant & equipment) — fittings, appliances, carpets, blinds, depreciating on shorter schedules

A new build typically delivers $8,000–$15,000 of depreciation in year one. An established property (post-1987 build, bought second-hand) delivers $3,000–$5,000 (Div 43 only — the 2017 rule blocks Div 40 on second-hand). Pre-1987 buildings deliver minimal depreciation.

A quantity surveyor depreciation schedule costs $500–$700 and is itself tax-deductible. The calculator uses an indicative figure based on property age; for an exact deduction, get a QS schedule.

The 10-year projection

The projection tab compounds three assumptions:

1. Rent growth — typical Australian rent growth is 2–4% per annum in cap cities, 3–6% in tight markets, sometimes negative in oversupplied corridors
2. Capital growth — the historical long-run average for capital-city Australian property is around 5–6% per annum, but with substantial cycle-to-cycle variation
3. Loan balance — IO loans hold the principal flat (equity = property value − original loan); P&I loans steadily pay down principal

The cumulative cashflow column is the running sum of each year's net position. For a typical negatively geared scenario, this stays negative throughout the 10-year window — the strategy only profits when the property is sold and the capital gain (less CGT) is realised.

P&I vs interest-only

Most investors choose interest-only for the deduction maximisation reason:

• P&I: lower interest cost over the loan life, equity built through repayments, but smaller annual deduction
• Interest-only: higher pre-tax cashflow (no principal portion), full repayment deductible, but no equity build — capital growth has to do all the work

In Australia, most lenders cap IO loan periods at 1–5 years before reverting to P&I. Most investors refinance or extend before that reversion.

What this calculator includes

Inputs:

• Property price, weekly rent, loan amount, interest rate, term, loan type (IO/P&I)
• Annual income (used to derive marginal tax rate)
• Property age band (drives indicative depreciation)
• Annual expenses: council rates, water, insurance, strata, maintenance, management fee %
• Vacancy rate %, rent growth %, capital growth %, projection years

Outputs:

• Cashflow: gross yield, net yield, weekly + annual pre-tax cashflow, full expense breakdown
• Tax: estimated depreciation, taxable loss/profit, tax saving at marginal rate, after-tax cashflow
• Projection: year-by-year property value, weekly cashflow, cumulative cashflow, equity (over 1–10 years)

For just the yield analysis, use the Rental Yield Calculator. For just the negative gearing tax position, use the Negative Gearing Calculator. For just the depreciation deduction schedule, use the Property Depreciation Calculator. For the after-CGT exit analysis, use the CGT Projection Calculator. For borrowing capacity to confirm the loan is even achievable, use the Borrowing Power Calculator.