How to use the investment property calculator
This calculator models the full financial picture of an Australian investment property: upfront costs, weekly cashflow, gross and net rental yield, depreciation, tax position, and capital growth over time.
Five short steps walk you through the inputs in the same order a mortgage broker would: purchase, loan, rent and income, expenses, then growth assumptions.
What counts as a good rental yield in Australia?
According to CoreLogic, the national average gross residential rental yield sits between 3.7% and 5.0%, with inner Melbourne and Sydney suburbs frequently below 3%. Regional Victorian centres typically deliver 4–5% gross.
Anything above 6% gross from a single-tenant residential property is rare and usually signals either a small regional market with limited capital growth, a property with hidden issues, or a non-standard configuration like a granny flat or rooming house.
Purpose-built Co-Living buildings collect rent from multiple self-contained tenancies in one dwelling. A NextGen build houses 4, 5, or 6 units at around $350 per room per week — between $72,800 and $109,200 in gross annual rent — which puts gross yields well above what a single tenancy can produce at the same purchase price.
Cashflow vs yield vs return: all three matter
Yield tells you the ratio of rent to price. Cashflow tells you how much money is moving in or out of your pocket each week. Return tells you how much your invested cash has actually compounded.
A property can have a strong gross yield, weak post-tax cashflow (because of high interest costs), and a great cash-on-cash return (because you put very little of your own money in). Read all three before deciding whether a property “stacks up”.
- Pre-tax weekly cashflow: gross rent minus all operating costs (vacancy, management, rates, insurance, maintenance, body corporate) minus mortgage repayments (interest AND principal).
- Post-tax weekly cashflow: pre-tax cashflow adjusted for the tax refund from any rental loss (or the extra tax on rental profit). Depreciation is included because it changes the tax bill without changing actual cash.
- Cash-on-cash return: Year-1 post-tax cashflow divided by your total cash at settlement. Tells you the percentage return on your invested money in the first year.
A practical negative-gearing example
Consider the calculator's default scenario: a $750,000 regional Victorian new build with a 20% deposit, a 30-year P&I loan at 6.3%, $550 per week rent, the usual operating costs, and an owner earning $120,000. Pre-tax it produces a cash loss of roughly $500 per week — about $365 of that is the rental shortfall (rent minus costs and interest) and the rest is principal repayments, which build equity rather than disappear. Adding a first-year depreciation claim of roughly $20,000 creates a taxable loss of about $39,000. At a 32% marginal rate (the 30% bracket plus the 2% Medicare levy), that returns a refund of around $12,500 — about $240 per week — which compresses the post-tax weekly loss to roughly $260. That $260/week is the genuine “holding cost” the investor must fund out of other income to keep the property.
If you buy jointly, the calculator splits the rental profit or loss 50/50, and each owner claims their half against their own income (assumed equal). Each partner receives a refund on half the loss at their own marginal rate, so the household refund can be larger or smaller than the individual case depending on which tax brackets the two incomes fall in.
What this calculator includes, and what it leaves out
The calculator automates the costs and tax mechanics that most people get wrong:
- Stamp duty for all eight states and territories: the published general (investor) schedules. First-home-buyer and owner-occupier concessions are not applied because the calculator targets investment purchases.
- Lenders Mortgage Insurance: added automatically whenever your loan-to-value ratio exceeds 80%, using a stepped estimate: roughly 1.0% of the loan at 80–85% LVR, 1.8% at 85–90%, 2.5% at 90–95%, and 3.5% above 95%. Real premiums vary by lender and insurer, so confirm the actual figure with your broker.
- Depreciation: Division 43 capital works (2.5% straight-line over 40 years on construction cost, for buildings completed after 1987) and Division 40 plant & equipment (diminishing-value, available on new builds because the post-9-May-2017 rules disallow second-hand assets in established properties). The figures are sensible estimates; a registered Quantity Surveyor produces the legally defensible schedule used at tax time.
- Income tax: FY 2026–27 ATO resident-individual brackets including the 2% Medicare levy, applied to your stated gross income to compute the negative-gearing refund or the extra tax on a rental profit.
Deliberately left out: capital gains tax and selling costs, because both depend on a future sale price and your income in the year you sell. Also not modelled: land tax, a recurring annual state tax that most investors pay (in Victoria the investor threshold has been just $50,000 of site value since 2024). Check your state revenue office's land tax calculator and treat it as an additional annual cost on top of the figures here.
And one calibration note: the assumptions target long-term residential tenancies in Australia. Commercial property and short-stay (Airbnb-style) letting have very different vacancy, expense, GST, and management dynamics, so treat any outputs for those use cases as indicative only.
Single-tenant rental vs Co-Living, what changes?
A standard residential property has one lease, one tenant, and one rent cheque.
A Co-Living property has 4, 5, or 6 self-contained units in a single dwelling, each with its own lease and rent. Same purchase budget, same loan, same tax mechanics, but the income line is roughly 2.5 to 4 times higher depending on the configuration.
Co-Living investing isn't free of trade-offs: operating costs are higher (more tenants, more wear, more compliance), the asset is more complex to manage, and resale requires a buyer who understands the Class 1B rooming house model. Co-Living NextGen addresses each of these in the product itself — see our property management page for how we manage the operational side and Co-Living investment packages page for the build specifications.
How capital gains tax works when you sell
Capital gains tax (CGT) is the tax you pay on the profit when you sell an investment property. The profit isn't simply sale price minus purchase price; it's sale price minus your cost base, and getting the cost base right usually saves investors thousands.
- Cost base: the purchase price plus stamp duty, legal and conveyancing fees, buyer's agent fees, and the cost of any capital improvements (a new kitchen, an extension), minus any Division 43 capital-works depreciation you claimed while holding the property. Claimed depreciation reduces the cost base, which increases the eventual gain. Depreciation is a deferral, not a free lunch.
- The 50% CGT discount: if you've owned the property for more than 12 months as an individual (or in a trust), only half the gain is taxable. Companies do not receive the discount.
- Taxed at your marginal rate: the taxable gain is added to your income in the year the contract is signed (not the settlement date) and taxed at whatever marginal bracket it lands in. A large gain can push part of itself into a higher bracket.
Worked example: buy at $750,000 with $40,000 of stamp duty and legals, claim $30,000 of capital-works deductions over eight years, then sell for $1,050,000. Cost base = $750,000 + $40,000 − $30,000 = $760,000. Gross gain = $290,000; after the 50% discount, $145,000 is added to your taxable income in the sale year.
Note: this calculator models the holding period, i.e. cashflow, tax refunds, equity, and yield while you own the property. It deliberately excludes CGT, selling costs, and sale proceeds, because those depend on a future sale price and your income in the year you sell.
Data sources and last-updated dates
Every rate table this calculator uses (ATO income tax brackets, stamp duty schedules for all eight states/territories, Div 43 and Div 40 depreciation rules) is listed with its source link and the date it was last reviewed in the “assumptions, formulas & sources” drawer above. If you spot something out of date, please email admin@colivingnextgen.com.au.
Disclaimer: This calculator is general information only and is not financial, taxation, or legal advice. Always speak with a licensed adviser before acting on these numbers.
