Investment Property Cash Flow Calculator

Pre-tax vs after-tax cash flow

Pre-tax cash flow is what actually leaves your bank account: rent received less repayments and running costs. After-tax cash flow adds back the tax you save when the property runs at a taxable loss. Depreciation is the key difference between the two — it's a deduction you claim without spending a cent, so it improves your after-tax position while leaving pre-tax cash flow untouched.

Costs investors routinely forget

• Council rates, water and owners corporation (strata) fees.
• Landlord insurance and building insurance.
• Property management fees plus letting and advertising fees between tenants.
• Repairs and maintenance — budget a realistic annual allowance, not zero.
• Land tax once your holdings pass the state threshold.
• Vacancy — even two weeks a year is roughly 4% of your rent.

Worked example

A $700,000 property returning $600 a week is a 4.5% gross yield. With a $560,000 loan at 6.3% interest only, interest alone is about $35,280 a year against roughly $30,600 of effective rent. Add $6,000 of expenses and management fees and the pre-tax shortfall is around $200 a week — but with $6,000 of depreciation and a 37% marginal rate, the after-tax cost drops considerably.

How loan structure changes the numbers

Interest-only repayments maximise short-term cash flow and keep the deductible balance high — useful while you still have non-deductible owner-occupier debt. Principal and interest builds equity faster and usually attracts a lower rate. There's no universally right answer; it depends on your other debts, tax position and how long you plan to hold.