Australia Rental Yield & Negative Gearing Calculator

Australian rents are conventionally quoted WEEKLY, not monthly, so this calculator converts your weekly rent to an annual figure (weekly rent × 52) first. Gross rental yield is then annual rent divided by property value, shown as a percentage: (annual rent ÷ property value) × 100. On a $700,000 property renting for $550 a week ($28,600 a year), that works out to roughly 4.09%. Net yield goes further, subtracting annual expenses (but not loan interest) from the rent before dividing by property value.

Negative gearing is when a rental property's income (rent) doesn't cover its costs (loan interest plus other expenses), producing a net cash shortfall before tax. In Australia, that shortfall can be claimed as a tax deduction against the investor's OTHER income (like salary), at their marginal tax rate — recovering part of the loss as a tax benefit, though the investor is still out of pocket overall on a cash basis. It's a genuinely distinctive feature of Australian property investing compared with many other countries, and this calculator makes the negative-gearing cashflow explicit, before and after that tax benefit.

It depends on your perspective and goals. Negative gearing means you're funding a real cash shortfall out of pocket every year, which the tax benefit only partially offsets — you don't come out ahead in cash terms just because of the deduction. Many investors accept a negatively geared property in the expectation that capital growth over time will outweigh the ongoing cash cost, but that's a bet on future prices, not a guaranteed outcome. A positively geared property (or one that becomes positively geared as rents rise or the loan is paid down) avoids this ongoing cash drag entirely.

Negative gearing is a cashflow/tax concept concerned specifically with deductible INTEREST cost — principal repayments (if any) aren't tax-deductible and don't affect whether a property is negatively geared, regardless of whether the underlying loan is interest-only or principal & interest. Quoting the full interest cost this way (loan amount × interest rate) is also how Australian investors and finance commentary conventionally frame the negative-gearing maths, which is why this calculator does the same.

There's no single 'good' number — it varies significantly by city, suburb, and property type — but gross yields in the 3-5% range are common in Australia's larger capital cities (where prices are high relative to rents), while regional areas and some outer suburbs can show notably higher yields. A high yield alone doesn't guarantee a good investment; weigh it against vacancy risk, capital growth prospects, and your actual cashflow position (including whether the property is negatively or positively geared) once financing is factored in.

No — this calculator focuses on the property's rental cashflow economics (yield and negative-gearing cashflow) before capital gains tax on eventual sale and before any depreciation (capital works or plant & equipment) deductions, which can further improve an investment property's after-tax position. Depreciation in particular is a significant, commonly underused deduction for Australian property investors — consult a quantity surveyor and a tax professional for guidance specific to your property and situation.