What is investment cashflow
The real weekly cost of holding an investment property.
Investment property cashflow is the difference between the rent you receive and the costs of holding the property — including mortgage interest, council rates, insurance, maintenance, vacancy, and property management. Most calculators give you the pre-tax number. We show pre-tax AND after-tax, because negative gearing meaningfully changes the picture for Australian investors.
Negative gearing
How tax flips the math
If your property runs at a loss (costs exceed rent), Australian tax law lets you offset that loss against your other taxable income — which generates a tax refund at your marginal rate. For a high-income borrower (37% or 45% marginal rate), the refund can cover 30-45% of the annual loss.
Example: a property with a $20,000 annual loss generates a $7,400 tax refund at the 37% rate. The real after-tax holding cost is $12,600 — significantly less painful than the pre-tax number suggests. Our calculator models this automatically based on the marginal rate you provide.
What we include
The cost stack
- Mortgage interest — first-year approximation = loan × rate. Slightly understates real interest because most calculations assume interest-only; for P&I, year 1 interest is close to this figure.
- Council + water rates — varies by LGA, typically $2,000–$4,500/year for a metro house.
- Insurance — landlord insurance typically $1,200–$2,500/year. Higher in flood/bushfire zones.
- Maintenance — 0.5% of property value annually is a conservative default. Older properties run higher; new builds lower.
- Vacancy allowance — 2 weeks/year ≈ 3.8% vacancy. Adjust higher for regional or unit markets.
- Property management — 6–9% of rent depending on state. Includes leasing fees, periodic inspections, statement processing.
What we don't include
Tax depreciation (Div 40 + Div 43) further reduces taxable rental income — meaning a bigger refund. Use our Tax Depreciation Calculator to estimate the depreciation deduction, then talk to your accountant about combined cashflow impact.
Common questions
Frequently asked
Should I aim for positive or negative cashflow?
Negative cashflow is sustainable IF the property is also delivering meaningful capital growth — the tax benefit subsidises the holding cost while the asset appreciates. Positive cashflow is preferred if growth is uncertain or you can't absorb the weekly loss.
Does the calculator include depreciation?
No — we calculate cashflow before depreciation. Depreciation typically adds $3,000–$10,000 in deductions, generating an additional $1,000–$4,500 in tax refund at most marginal rates. Use our depreciation calculator separately.
What if interest rates rise?
A 1% rate increase on a $640,000 loan adds ~$6,400/year in interest. At 37% marginal rate, the after-tax cost is ~$4,000/year. Run the calculator at higher rates to stress-test your cashflow tolerance.
Does negative gearing still exist?
Yes — as of mid-2026. Negative gearing for existing dwellings is occasionally floated for reform but remains the law. The 2017 changes restricted Div 40 depreciation on second-hand plant & equipment for existing properties; Div 43 (capital works) was unchanged.
Disclaimer: Cashflow modelling uses your inputs and standard Australian cost assumptions. Actual costs vary by property, year, and tax position. Tax rules change — confirm current treatment with your accountant before relying on the after-tax figure. This is not tax or financial advice.