Break-Even Calculator for Australian Property Investors
Work out how long it takes for an investment property to pay you back. Enter your purchase price, upfront costs, rent, mortgage repayment and expected capital growth, and this free calculator projects the year your total returns finally cover what it cost you to get in.
It is built around the way Australian investors actually think about a property: a deposit and stamp duty paid upfront, a weekly cash flow shortfall to carry, and capital growth doing the heavy lifting over time.
Your numbers
Stamp duty, legal fees, inspections.
Rates, insurance, maintenance, management.
Break-even point
Cash flow negative3 years
Until total returns cover your $30,000 of upfront costs.
Total return over 30 years
Annual net income
-$9,580
Rent minus expenses and mortgage
Return in 5 years
+$82,092
Value $729,992
Return in 10 years
+$192,347
Value $888,147
Return in 20 years
+$523,074
Value $1,314,674
How the break-even calculator works
- 1
Enter the purchase price
Use the price you expect to pay. This is the base the calculator grows each year at your chosen capital growth rate to estimate future value.
- 2
Add your upfront purchase costs
Stamp duty, conveyancing or legal fees, building and pest inspections, and any lenders mortgage insurance. This is the amount your returns have to claw back before you break even.
- 3
Enter the weekly rent and monthly repayment
The rent is annualised at 52 weeks, and the mortgage repayment is annualised at 12 months. Together with expenses they set your annual cash flow.
- 4
Add your annual holding expenses
Council and water rates, landlord insurance, property management fees, strata and maintenance. These are the running costs on top of the loan.
- 5
Set your expected capital growth rate
Choose a realistic long-term growth rate for the area. The break-even year is highly sensitive to this number, so it pays to be conservative.
A worked Australian example
Say you buy a $600,000 investment property, spend $30,000 getting in, rent it for $560 a week, and assume 4% annual capital growth. Here is how the cash flow and the break-even point stack up.
- Annual rental income ($560 x 52)
- $29,120
- Mortgage repayments ($2,600 x 12)
- -$31,200
- Annual holding expenses
- -$7,500
- Annual net cash flow
- -$9,580
- Upfront purchase costs to recover
- $30,000
- Break-even point
- Year 3
The property runs at a cash shortfall of about $9,580 a year, roughly $184 a week, so on cash flow alone it never gets ahead. What turns it around is growth. At 4% a year the $600,000 property is worth about $675,000 after three years, a capital gain of around $75,000. By the end of year 3 that gain, minus the rent shortfalls you have funded along the way, first exceeds your $30,000 of upfront costs, so year 3 is your break-even point. The result depends entirely on the growth actually arriving, which is why a conservative growth rate gives you a more honest picture.
What break-even means for an investment property
Break-even is the year your total return first covers what it cost you to buy in. The calculator defines total return as your capital gain plus your cumulative net rental income, and compares it against your upfront purchase costs such as stamp duty and legal fees.
Because most investment properties run at a cash flow loss in the early years, the capital gain usually has to do the work. That is why a negatively geared property can still break even reasonably quickly if it is growing, and why a flat market pushes the break-even point out for years.
Why capital growth drives the result
Small changes in the growth rate move the break-even year a lot. At 4% growth a $600,000 property gains around $75,000 over three years, but at 2% it gains only about $37,000, so it takes longer to absorb the same upfront costs and the ongoing cash shortfall.
Capital growth is also the least predictable input. Past performance in a suburb is a guide, not a guarantee, so it is sensible to run the calculator at a conservative rate and again at an optimistic one to see the range of outcomes rather than betting on a single figure.
What this calculator leaves out
To keep the projection clear, it does not model tax. Negative gearing can refund part of your cash shortfall at your marginal rate, and depreciation is a non-cash deduction that lowers your taxable income, so your real after-tax holding cost is usually lower than the cash figure shown here.
It also assumes a steady growth rate and no vacancy, repairs blowouts or interest rate changes. Real returns are lumpier than a smooth line. Treat the break-even year as a planning estimate and confirm the tax side with a qualified accountant.
Using break-even to compare properties
The break-even year is a useful way to compare two purchases on a like-for-like basis. A cheaper property with lower upfront costs can break even sooner even if it grows more slowly, while a higher-growth property may take longer to clear a bigger stamp duty bill.
It also frames the holding period you need. If a property only breaks even at year 8, you need to be confident you can carry the cash shortfall and hold for at least that long. Pair it with your rental yield to understand both the income and the timeline.
Frequently asked questions
It is the year your total return, capital growth plus cumulative net rental income, first covers your upfront purchase costs like stamp duty and legal fees. After that point the property has effectively paid back the cost of getting in.
Related calculators
Figure out your monthly cash flow by inputting rental income and expenses to see if you're in the positive or negative.
Open calculator →Project your property's future value based on an annual appreciation rate.
Open calculator →Calculate the tax benefits of negative gearing and your true out-of-pocket cost after tax savings.
Open calculator →Calculate the rental yield by entering the property price and expected rental income.
Open calculator →Get an idea of the stamp duty costs you'll need to pay when purchasing a property in any Australian state.
Open calculator →