The idea of a property that pays for itself from day one, where the rent covers the mortgage and costs with money left over, is appealing and widely sold. In reality, genuine positive cashflow property is uncommon in Australia's capital cities right now, and the reason comes down to simple arithmetic. Understanding why protects you from chasing a number that often hides a weaker investment.
The maths that makes it rare
A property is positively geared when the rent it earns exceeds all the costs of holding it, including the loan interest. The problem is the gap between yields and interest rates. Gross rental yields in Brisbane sit around 3.2% for houses and 4.1% for units citywide, while mortgage rates after this year's rate rises are higher than that. When your interest rate alone is above your gross yield, before you have paid a single other cost, the property cannot be cashflow positive.
Where positive cashflow usually lives
Positive cashflow does exist, but it tends to live in specific places, and those places come with trade-offs. You find it in regional towns, mining or single-industry areas, and lower-priced outer suburbs where yields are higher relative to price. The catch is that high yield and strong capital growth rarely sit in the same property.
The trade-off you are really making
This is the central tension in property investing: cashflow versus growth. A higher-yielding property is easier to hold because it costs you little or nothing each month, but it may not grow much. A lower-yielding, well-located property costs you money to hold but compounds in value over time.
JSC Property Investments helps you run the real after-cost numbers and choose the right strategy deliberately. Book a Kickoff Call with our team and let's build a portfolio that actually stacks up.