What is gross rental yield?

Gross rental yield is annual rent divided by property purchase price, expressed as a percentage. In Australia, residential yields typically range from 3-5% for houses in capital cities to 5-7% for units and regional properties. Higher yield often means lower capital growth potential.

Why is Y1 cashflow often negative on Australian property?

Interest costs on a typical 80% LVR loan usually exceed net rental income after holding costs, especially in the first years of ownership. This is called negative gearing. The loss offsets your other taxable income at your marginal tax rate, reducing your tax bill. Over time, as rent grows and the loan is paid down, cashflow typically turns positive.

What are typical holding costs on an Australian investment property?

On ATO rental schedule data, running costs come to about 33% of gross rent for a house and about 44% for a unit, where the strata levy adds the difference. The lines are council rates (about 0.248% of property value a year), repairs and maintenance (0.188%), insurance (0.141%), water (0.109%) and sundry costs (0.143%), plus property management (about 7.5% of rent), a letting fee and strata on a unit or townhouse. Land tax applies on top where the land value is over the state threshold.

Residential quick-add

Model a residential investment in 60 seconds.

Weekly rent, vacancy, property management, interest, growth. The essentials to see if a residential deal stacks up before you commit to full DD. Purpose-built for Australian residential investors, using the same sourced defaults as the StratMap tracker: a 3.5% gross yield for houses and townhouses and 4.6% for units, 2% vacancy, 7.5% management, running costs as a share of the property's value, growth of 5.75% a year for houses and 3.8% for units, and each state's stamp duty schedule. Every default can be overwritten.

Looking at a commercial property? Use the commercial calculator instead.

Inputs

Property + purchase

Purchase price $

Weekly rent (3.5% yield default) $

Property type

State

Loan + interest

LVR %

Loan interest rate %

Loan type

Loan term yrs

Holding costs

Vacancy %

Property management %

Council rates (% of value a year) %

Insurance (% of value a year) %

Repairs + maintenance (% of value) %

Water (% of value a year) %

Sundry (% of value a year) %

Strata levy (annual, by type) $

Letting fee (weeks of rent a year) wks

Running cost growth %

Growth + rent trajectory

Annual capital growth %

Annual rental increase %

Ownership term yrs

The growth engine. Capital growth compounds over long holds. At the 5.75% house default a value doubles in about 12.4 years; at the 3.8% unit default, about 18.6 years. Rent grows 3% a year and running costs 4.1%, while the loan stays flat (interest-only) or shrinks (P+I). The cashflow card shows Year 1 and the final year of the term.

Acquisition costs

Stamp duty (state schedule) $

Solicitor + valuation $

Building + pest + other $

Gross yield

4.1%

Annual rent / price

Y1 cashflow

-$8,320

After interest + holding

Cash-on-cash

-4.4%

Y1 return / cash in

Total cash in

$189k

Deposit + costs

End-of-term value

$1.40M

Y10 estimate

End-of-term equity

$776k

Value less loan

Value + equity trajectory

The chart shows modelled equity by year against the deposit amount.

Property value Loan balance

Year 1 P&L breakdown

Gross annual rent$0

Less vacancy$0

Less property management$0

Less letting fee$0

Less council rates$0

Less insurance$0

Less repairs + maintenance$0

Less water$0

Less sundry$0

Less strata levy$0

Less loan interest$0

Net Year 1 cashflow$0

How this compares

Your inputs plotted against typical Australian residential ranges. The dark line is the national default for the property type. Numbers only. What that means for your decision is between you and your team.

Gross yield4.1%

Low 2%National 3.5% (house)High 8%

Y1 cash-on-cash-4%

-10%Breakeven 0%+10%

Growth assumption6%

0%Long-run default 5.75% (house)10%+

See the modelled 30-year view

This calculator shows Y1 numbers. StratMap models 30 years of growth, tax (negative gearing + depreciation + CGT), portfolio interactions, and your income goal. Free.

The tool models. Not financial advice. Cashflow, yield, and end-of-term projections are estimates based on your inputs and the defaults the StratMap tracker uses (national gross yields, ATO rental schedule running costs as a share of value, long-run growth rates, each state's duty schedule at investor rates, before any concession or foreign purchaser surcharge). Real transactions depend on tax position (negative gearing, depreciation), specific property condition, and finance approval. For full 30-year modelling under Australian tax, load your properties into the tracker.