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Run the numbers while you read and see how the concepts apply to your situation.
Cash flow is the weekly reality
Positive cash flow means the rent covers the property's cash costs. Negative cash flow means the investor contributes money to hold the property.
Neither result is automatically good or bad. A negative cash-flow property may be bought for capital growth. A positive cash-flow property may have higher vacancy or maintenance risk.
How to compare
Count real cash costs: repayments, rates, water, insurance, strata, management, repairs, vacancy and land tax. Then compare pre-tax and after-tax results.
Use the Investment Property Yield Calculator and Negative Gearing Calculator together.
Bottom line
Do not use gross yield as a shortcut for cash flow. The property works only if the numbers survive real expenses and interest-rate changes.
Sources: ATO rental property expense guidance and RealEstateCalc methodology. General information only.
RealEstateCalc Editorial
Property & Finance ResearchThe RealEstateCalc editorial team researches and writes about Australian property, finance, and tax topics. All content is fact-checked against official sources including the ATO, state revenue offices, ASIC Moneysmart, and the RBA.
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