Investment Property Calculator
First-year cash flow on an Australian investment property: rent after vacancy, expenses, loan interest, depreciation and the tax effect, per year and per week.
After-tax cash flow per week
-$62.77On a $600,000 property with a $120,000 deposit, 6% interest-only loan and $600 a week rent, the first year shows a net rental loss of $4,800 (negatively geared), which saves $1,536 in tax at a $120,000 income; after-tax cash flow is -$3,264 a year (-$63 a week).
| Loan amount | $480,000 |
|---|---|
| Repayments (interest-only, monthly) | $2,400.00 |
| Rent after vacancy | $30,000 |
| Cash expenses | −$6,000 |
| Interest (year 1) | −$28,800 |
| Net rental loss | -$4,800 |
| Tax saved (marginal 30% + Medicare) | $1,536 |
| Pre-tax cash flow | -$4,800 |
| After-tax cash flow (year) | -$3,264 |
| After-tax cash flow (week) | -$62.77 |
How this was calculated
| Rent: $600 × 50 weeks (after 2 vacant) | $30,000.00 |
|---|---|
| Cash expenses (rates, insurance, management, maintenance, strata) | -$6,000.00 |
| Loan interest, year 1 (6.00% on $480,000) | -$28,800.00 |
| Depreciation (non-cash deduction) | -$0.00 |
| Net rental loss (negatively geared) | -$4,800.00 |
| Tax saved at your rates (income $120,000, marginal 30%) | $1,536.00 |
| Principal repayments (cash out, not deductible) | -$0.00 |
| After-tax cash flow for the year | -$3,264.00 |
Tax effect = tax on $120,000 ($28,920) minus tax on $115,200 ($27,384), 2026–27 resident rates with Medicare levy. First-year interest from the amortisation schedule.
On a $600,000 property with a $120,000 deposit, 6% interest-only loan and $600 a week rent, the first year shows a net rental loss of $4,800 (negatively geared), which saves $1,536 in tax at a $120,000 income; after-tax cash flow is -$3,264 a year (-$63 a week).
Source: ATO Last verified How we keep this accurate
How the investment property calculator works
The calculator models the first year of holding a rental property, separating what is deductible from what is a cash cost:
- Loan = price − deposit; year-one interest and repayments come from a standard amortisation schedule (or interest-only).
- Rent for the weeks the property is let, less cash expenses.
- Taxable result = rent − expenses − interest − depreciation. A loss saves tax at your marginal rate; a profit adds tax.
- Pre-tax cash flow = rent − expenses − interest − principal repayments.
- After-tax cash flow = pre-tax cash flow + tax effect, shown per year and per week.
Worked example
A $600,000 property with a $120,000 deposit, a 6% interest-only loan and $600 a week rent for 50 weeks: rent $30,000, expenses $6,000, interest $28,800. The taxable result is a $4,800 loss, which saves $1,536 in tax for an investor on $120,000. After-tax cash flow is −$3,264 a year, or about $63 a week. Switching to principal and interest adds roughly $5,700 of principal repayments in year one: not deductible, but building equity.
What this calculator doesn’t cover
- Capital growth, rent increases, rate changes and years beyond the first.
- Capital gains tax on sale, land tax, and lenders mortgage insurance.
- Purchase costs in the loan (enter the deposit net of costs if they are borrowed).
Frequently asked questions
How do I calculate investment property cash flow?
Start with rent for the weeks the property is let. Subtract cash costs: rates, insurance, management, maintenance, strata and loan repayments. That is pre-tax cash flow. Then work out the tax effect: interest, expenses and depreciation are deductible, so a rental loss saves tax at your marginal rate. After-tax cash flow is the pre-tax figure plus the tax saved. The calculator shows every step for year one.
How much deposit do I need for an investment property?
Lenders typically want 20% to avoid lenders mortgage insurance, so $120,000 on a $600,000 property, plus purchase costs of roughly 4% to 6% for stamp duty, legal fees and inspections. Smaller deposits are possible with LMI. Equity in an existing home is often used instead of cash. The calculator takes the deposit and price and works out the loan and its cost.
Should I use an interest-only loan for an investment property?
Interest-only loans lower the repayments and keep the whole repayment deductible, which improves cash flow and the tax position. The trade-off is that no equity is built through repayments and interest-only rates are usually higher; the loan reverts to principal and interest after the interest-only period, typically five years. Toggle the option in the calculator to compare both cases.
Are principal repayments tax deductible?
No. Only the interest portion of a loan repayment is deductible. Principal repayments reduce the loan but are not an expense for tax, which is why a principal-and-interest loan can be cash-flow negative even when the property is positively geared for tax. The calculator separates interest (deductible) from principal (cash only) in the breakdown.
What expenses should I budget for a rental property?
Typical annual costs are council rates, water rates, landlord insurance, property management (around 5% to 8% of rent plus letting fees), repairs and maintenance (often budgeted at 1% of the property value), strata levies for units, land tax above the state threshold, and a vacancy allowance of two to four weeks. Add them as a single annual figure in the calculator.
Does the calculator include capital growth?
No. It shows the holding cost for the first year only, which is the cash question most investors need answered first. Capital growth, rent increases, changing interest rates and the eventual capital gains tax are outside the scope; the CGT calculator (planned) covers the sale. Treat the result as the annual cost of holding the property today.
Sources and assumptions
Related calculators
- Negative gearing calculator Tax saved on a rental loss at your marginal rate.
- Rental yield calculator Gross and net yield on a rental property.
- Depreciation calculator Diminishing value vs prime cost deductions by year.
- Rent calculator What rent an income supports, weekly to monthly, bond and increase checks.
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