🏘️Rental Property Calculator

The Power of Negative Gearing

In Australia, 'negative gearing' occurs when the costs of owning an investment property exceed the rental income. The ATO allows you to offset this loss against your other income, like your salary, reducing your tax bill. Our calculator estimates this tax benefit, showing how it can improve your net cash flow and make property investment more accessible for high-income Australian taxpayers.

Australian Taxation Office (ATO)

Gross vs. Net Rental Yields

The Australian Bureau of Statistics (ABS) tracks rental price movements across the country. While a 'Gross Yield' might look good at 5%, the 'Net Yield' after strata fees, council rates, and agent commissions is what matters. In Australian apartment markets, strata fees can be a significant drag on returns. Use this tool to include all Australian-specific holding costs for a realistic view of your portfolio's performance.

Australian Bureau of Statistics (ABS)

Depreciation Schedules and Tax

A key Australian strategy is claiming 'Capital Works' and 'Plant and Equipment' depreciation. A professional quantity surveyor report can find thousands in tax deductions. The ATO has specific rules about what can be depreciated, especially for established vs. new properties. Our calculator allows you to input estimated annual depreciation to see its massive impact on your 'after-tax' internal rate of return (IRR).

ATO – Residential Rental Properties

What is a typical rental yield in Australia?

Rental yields in Australia currently range from 2.5% in premium Sydney suburbs to 6%+ in regional mining towns. Generally, houses have lower yields but higher capital growth potential, while apartments offer higher yields. This calculator helps you determine your yield based on real-time listing data in your specific Australian postcode.

How do management fees work in Australia?

Property management fees in Australia typically range from 5% to 10% of the weekly rent, plus GST. There are also 'letting fees' (usually 1-2 weeks' rent) when finding a new tenant. Our tool includes these industry-standard fees in its expense calculation, ensuring your cash flow projections are accurate for the Australian rental market.

Does this tool account for Australian Land Tax?

Yes, you can input your estimated Land Tax, which is a state-based tax applied to the unimproved value of the land for investment properties. Because thresholds vary by state, Land Tax can significantly impact the profitability of multiple-property portfolios in Australia. Our calculator ensures this often-overlooked expense is factored into your ROI.

Cap Rate

Cap Rate (Capitalization Rate) is annual NOI divided by purchase price. Shows return if you paid cash. Good: 6%+, Excellent: 8%+.

Cash-on-Cash Return

Annual cash flow return on your cash investment (down payment + closing costs). Accounts for leverage. Good: 8%+, Excellent: 12%+.

1% Rule

A quick rule: monthly rent should be at least 1% of purchase price. If a property costs $300,000, it should rent for $3,000+/month.

DSCR

Debt Service Coverage Ratio shows how much NOI covers mortgage payments. Below 1.0 means negative cash flow. Lenders typically require 1.25+.

NOI

Net Operating Income is income after all operating expenses, but BEFORE mortgage payments. It's the standard metric for valuing commercial properties.