Property investment: check the numbers before you buy
Before you buy an investment property, check three things: what rent it can realistically earn, what it will cost you to own, and whether you could cope if things went wrong. These tools help with the numbers. They are estimates from the figures you enter, not advice.
Tools
- Rental yield calculator Work out the gross and net yield from the purchase price, the rent and your costs.
- Cash flow calculator See what the property would cost you, or earn you, each week after the loan, and what happens if interest rates rise.
The calculators work in your browser. Nothing you type is sent to RealSearch, saved, or added to the web address.
Guides
- Investment checks: what to look at before you buy a rental property
- Landlord and property management guide: renting out your investment property
Research
- Browse suburb profiles
- Browse properties for rent by state
- Browse sold properties by state
- Research the value of an address
- Suburb Profile Report
- Property checks & reports
The basics
What is rental yield?
How much does the rent earn compared with the price?
Gross yield is a year of rent as a share of the purchase price. Net yield takes the costs of owning the property off first.
- Two properties with the same price can have very different net yields, because their costs differ.
- Neither measure includes the cost of buying, tax, or any rise or fall in the value of the property.
What is cash flow?
How much would it cost me each week to hold it?
Cash flow is the rent you collect, less the running costs and the loan repayments. It can be negative.
- A negative cash flow means you pay the difference from your own pocket. Some investors accept that on purpose, but you need to be sure you can afford it for as long as you hold the property.
- Test it at a higher interest rate than today's. The cash flow calculator does that for you.
What do the calculators leave out?
What should I check somewhere else?
They only use the numbers you type, and they keep things simple on purpose.
- Tax, and any tax benefits or tax on a later sale. Speak to a registered tax agent.
- The costs of buying, such as stamp duty, legal fees and inspections.
- Changes in the value of the property, and changes in rent or interest rates over time.
- Your own situation, such as other income, other loans and how long you plan to hold the property.
This is general information, not financial, legal or tax advice. The calculators give estimates from the numbers you enter. Speak to a licensed financial adviser, a registered tax agent and a solicitor or conveyancer before you decide.
-
Disclaimer
Our service utilises AI search capabilities based on publicly available indexed data for non-commercial purposes and testing phase. The above information is an excerpt from publicly available data and may be subject to errors or changes. RealSearch.com.au makes no representations or warranties regarding the accuracy of this data. Please consult the Agency/Agents directly for the most up-to-date information.