How to calculate the true cash flow of a Brisbane investment property in 2026
Brisbane unit median of $866,000 from Cotality March 2026. Cash flow examples use indicative interest rate of 6.5% P&I. Actual costs and tax outcomes will vary depending on individual circumstances.
Most property investors only look at gross rental yield. But gross yield is just the starting point - the number that tells you almost nothing about what the property will actually cost you to hold each month. Here is how to run the real numbers before you buy.
There is a significant difference between a property's gross rental yield and what it actually costs you to own it. Gross yield - annual rent divided by purchase price - is the headline figure that gets quoted in suburb profiles and listing descriptions. It sounds clean and simple. But it ignores roughly half of the picture: all the costs of owning, financing, and maintaining the property that come between the rent arriving and the money hitting your account.
Before you commit to any investment property in Brisbane, you need to be able to model the true monthly cash position: what comes in, what goes out, and what the after-tax holding cost actually is. This guide walks through the full calculation with a real Brisbane example.
- 1.Start with gross rental income
- 2.Subtract all ownership costs
- 3.Calculate net rental income
- 4.Add mortgage costs to find your true holding cost
- 5.The tax impact changes everything
Start with gross rental income
Gross rental income is simply the weekly rent multiplied by 52. In Brisbane's current market, the median rent for a unit is $650 per week, producing $33,800 in annual gross income before any costs are deducted. This is your starting point - not your cash flow position.
Subtract all ownership costs
The ownership costs that reduce your rental income fall into two categories: regular ongoing costs and variable costs. Many first-time investors either forget some of these entirely or dramatically underestimate the total. Here is the full list to include in any cash flow model.
| Metric | What it includes | Typical result |
|---|---|---|
| Property management fee | 7-10% of rent - $2,366 to $3,380/yr on $650pw rent | Largest ongoing cost |
| Letting fee (new tenancy) | 1-2 weeks rent - amortise over average tenancy length | Per vacancy |
| Council rates | $1,500-$2,500/yr - varies by property type and council | Annual fixed cost |
| Water rates (fixed component) | $800-$1,200/yr - variable usage charged to tenant | Annual fixed cost |
| Body corporate (units) | $2,000-$8,000+/yr - varies hugely, always check before buying | Check before buying |
| Landlord insurance | $1,200-$2,000/yr - covers loss of rent, damage, liability | Essential |
| Maintenance and repairs | $1,000-$3,000/yr - budget higher for older properties | Variable |
| Vacancy allowance | 1-2 weeks/yr - budget for changeover between tenancies | Allow for this |
| Accountant / tax agent | $300-$600/yr for investment property tax return | Annual cost |
Calculate net rental income
Net rental income is gross rent minus all ownership costs. For a Brisbane unit at $650 per week, here is a realistic full-year cost model.
| Gross rental income (52 weeks) | $33,800 |
| Property management (8.5%) | -$2,873 |
| Council rates | -$1,800 |
| Water (fixed component) | -$900 |
| Body corporate | -$3,500 |
| Landlord insurance | -$1,500 |
| Maintenance allowance | -$1,500 |
| Vacancy allowance (1.5 weeks) | -$975 |
| Letting fee (amortised) | -$600 |
| Accountant | -$450 |
| Net rental income | $19,702/yr ($378/wk) |
The net rental yield on this property - assuming a purchase price of $866,000 (Brisbane unit median) - is $19,702 / $866,000 = 2.27%. That is a significant reduction from the gross yield of 4.0% that gets quoted in suburb profiles. This is why understanding net yield matters more than gross yield for any investment decision.
Add mortgage costs to find your true holding cost
Net rental income tells you what the property earns after running costs. But most investors finance the purchase - which means the monthly mortgage payment is the largest number in the calculation. At current rates, a $693,000 loan (80% of $866,000) on a principal and interest basis at 6.5% generates monthly repayments of approximately $4,382 - or $52,584 per year.
| Net rental income | $19,702 |
| Annual mortgage repayments | -$52,584 |
| Annual cash shortfall (before tax) | -$32,882 |
| Per week out of pocket (before tax) | -$632/week |
Before tax, a Brisbane unit at the current median price with a 20% deposit costs approximately $632 per week out of pocket. This is the number that determines whether your investment is genuinely sustainable. If your household budget cannot comfortably absorb that figure in addition to your existing costs, the investment creates financial stress rather than wealth.
The tax impact changes everything
The before-tax cash position looks confronting. But the ATO effectively subsidises a significant portion of the holding cost through negative gearing and depreciation deductions. All of your ownership costs - interest, management fees, rates, insurance, maintenance, and depreciation - are tax deductible against your rental income and other income.
For an investor on a $100,000 salary in the 34.5% marginal tax bracket, the net tax saving on a $32,882 annual shortfall is approximately $11,344 per year - reducing the true after-tax weekly holding cost to approximately $416 per week. Add in a depreciation claim of $8,000 to $12,000 per year on a newer Brisbane unit, and the weekly holding cost can drop further to approximately $280 to $340 per week.
| Metric | What it includes | Typical result |
|---|---|---|
| Before tax, no depreciation | Annual shortfall: -$32,882 | -$632/week |
| After tax, no depreciation | Tax saving of $11,344 at 34.5% bracket | -$414/week |
| After tax, with $10K depreciation | Additional $3,450 tax saving on top | -$348/week |
| After tax, with $15K depreciation | Additional $5,175 tax saving on top | -$315/week |
These are illustrative estimates. Your actual tax position depends on your marginal rate, other income, and your specific property's depreciation potential. Always model this with your accountant before purchase - not after.
The weekly after-tax holding cost is the number that determines whether you can actually sustain the investment through a full property cycle. A $315 to $414 per week holding cost on a Brisbane unit is a real commitment - roughly equivalent to a second rent payment. If your household budget cannot comfortably absorb that figure in addition to your existing costs, the investment creates financial stress rather than wealth. Be honest about your budget before you sign a contract.
This article is general information only and does not constitute financial, tax, or investment advice. Cash flow examples are illustrative and based on Brisbane unit median of $866,000 (Cotality March 2026), indicative interest rate of 6.5% P&I, and estimated ownership costs. Actual costs, rates, and tax outcomes will vary significantly depending on individual circumstances, property type, lender, and tax position. Always seek independent financial and tax advice before making investment decisions.
General information only. This article does not constitute financial, legal, or investment advice. Always consult a licensed financial adviser or mortgage broker before making investment decisions.
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