Investment property cash flow in late 2026: a worked year
A $750,000 investment property bought with a 20% deposit, at the latest published average investor rate and the national rental yield, runs about $15,360 a year short before tax. That is roughly $295 a week from your own pocket. Rent brings in $28,875. Interest alone takes $38,460. If September's rate rise is passed on in full, the gap is about $324 a week.
Cash flow is the least exciting number in property and the one that decides whether you keep the asset. Growth is something you hope for. Cash flow is what leaves your account on the first of the month.
We built one year for an ordinary purchase, using published averages wherever one exists and saying so where we have had to assume.
The example, as at 3 October 2026
- Price: $750,000. Deposit 20%. Loan: $600,000, interest only
- Loan rate: 6.41%, the average for new investor loans in July 2026
- Rent: 3.85% gross yield, the national figure for September 2026
- Running costs: 20% of rent. This is our assumption, not a published figure
- Result: about $295 a week short, before tax
Sources: Reserve Bank of Australia, Cotality
The year, line by line
| Dollars | |
|---|---|
| Rent in | $28,875 |
| Loan interest | $-38,460 |
| Running costs | $-5,775 |
| Shortfall before tax | $-15,360 |
Source: Presm arithmetic. Rate from the Reserve Bank of Australia, yield from Cotality. Running costs assumed at 20% of rent.
| Line | Per year | How we got it |
|---|---|---|
| Rent | $28,875 | $750,000 at a 3.85% gross yield |
| Loan interest | $38,460 | $600,000 at 6.41%, interest only |
| Running costs | $5,775 | 20% of rent, assumed |
| Shortfall before tax | $15,360 | About $295 a week |
Two honest notes on that table.
Running costs are the soft number. Council rates, insurance, a property manager, repairs and, for apartments, strata levies. They differ a lot from one home to the next. We used a round 20% of rent so the example could be followed. Get real quotes for yours.
The rate is from July. If your lender passed on September's rise in full, 6.41% becomes 6.66%, the interest rises to $39,960, and the shortfall becomes about $324 a week.
Our result lands close to Treasury's own. In its examples Treasury uses a rental loss of $14,810, which it says is roughly the average loss claimed by investors in the top tax bracket.
Three levers
The yield. Units pay more rent per dollar. At the national unit yield of 4.7%, the same $750,000 brings in $35,250. Even with higher running costs at 20%, the shortfall drops to about $197 a week.
The deposit. Every extra $50,000 of your own money removes about $3,200 of interest a year at this rate, around $62 a week.
The rate. A quarter of a point on $600,000 is $1,500 a year. The four rises of 2026 add up to $6,000 a year on this loan.
Rent growth helps slowly. National rents rose 5.5% over the past year. On $28,875 that is about $1,590 more, which covers one quarter point rise and a little over.
What tax does to the shortfall
Until now, a loss like this cut your tax bill. Treasury's own figures: a $14,810 loss is worth $4,761 to someone earning $80,000 and $6,961 to someone on $210,000.
Whether you still get that depends on when you bought.
| Your property | The loss |
|---|---|
| Held before 7.30 pm on 12 May 2026 | Still reduces your other income, until you sell |
| A new build | Still reduces your other income |
| An established home bought after 12 May 2026 | Reduces your income until 30 June 2027, then is carried forward |
So for a new buyer of an established home, plan on carrying the full $295 a week yourself from July 2027. The loss is kept and used later against rent or a capital gain, but it does not help your cash this year. The detail is in negative gearing is now law.
Our view
A shortfall is not a reason to walk away. Plenty of investors pay in every week and are glad they bought. It is a reason to know the number before you sign, and to ask one question: could we pay this for five years if nothing went our way?
If the answer is a clear yes, you are buying with your eyes open. If it depends on a rate cut or a tax refund, look for a higher yield or bring a bigger deposit.
For where yields sit in each city, see rents up, prices down.
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Frequently asked questions
How do I calculate cash flow on an investment property?
Take the yearly rent, subtract the loan interest, then subtract the running costs: rates, insurance, management, repairs and strata. What is left is your cash flow before tax. If it is negative, that is the amount you must pay in from your own income.
Is investment property cash flow positive in 2026?
Rarely. With the average new investor loan at 6.41% and the national gross yield at 3.85%, a typical purchase with a 20% deposit runs at a loss before tax. Cotality says opportunities for neutral to positive cash flow remain low.
How much does a $750,000 investment property cost per week?
On our example, about $295 a week before tax: $28,875 of rent against $38,460 of interest and $5,775 of running costs. Your own figures will differ with the rent, the rate and the deposit.
What happens to the loss at tax time?
For a property you held before 12 May 2026, or a new build, the loss still reduces your taxable income. For an established home bought after that, the loss stops reducing your other income from 1 July 2027 and is carried forward.
Sources
- Reserve Bank of Australia, lenders' interest rates, July 2026
- Cotality Home Value Index, rents and yields to 30 September 2026
- Treasury, Negative Gearing and Capital Gains Tax Reform fact sheet, Budget 2026 to 27
The worked year is an example with stated assumptions, not a forecast for any property. This is general information, not financial or tax advice.