Property and equity
Investment property cashflow
The number an investor asks for is what it costs them a week. This works it out from rent, the repayment and the running costs, then shows how the tax deduction changes it.
Your numbers
650,000
130,000
620
Two per cent is about one week a year.
4,500
Result
After tax, a week
$207.37 out
- Rent after vacancy
- $31,595
- Loan repayments a year
- $38,421
- Management fee
- $2,212
- Rates, insurance, strata
- $4,500
- Cash position before tax
- -$13,537
- Taxable loss
- $7,444
- Gross yield
- 4.96%
Out of pocket before any deduction.
Interest is deductible; the principal portion of the repayment is not.
Negative gearing turns a loss into a smaller loss. It is still a loss, and it only pays off if the property grows enough to cover it.
What this does not tell you · This is not tax advice and no part of it should be relied on as such. Depreciation, capital works, ownership structure, land tax and capital gains all change the answer, and only a registered tax agent can give a client theirs.
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