Investment Property Cashflow Calculator

Investment property cashflow is the net amount left after all rental income is received and all expenses are paid, including mortgage payments and tax. A positive cashflow means the property generates more income than it costs to hold each year; a negative cashflow means you're topping it up from your other income. Cashflow is distinct from capital growth — a property can be cashflow-negative but still a good investment if it appreciates strongly.

Yes. From the 2025-26 tax year, 100% of mortgage interest on residential rental properties is deductible. Interest deductibility was progressively restored: 50% for 2023-24, 80% for 2024-25, and fully restored to 100% from 2025-26. New builds with a Code Compliance Certificate issued after 27 March 2020 have always had 100% interest deductibility regardless of tax year.

Since the 2019-20 tax year, residential rental deductions that exceed your rental income cannot be used to offset other income like salary or business income. The excess deductions are ring-fenced and carried forward to offset future residential rental income only. This means negative gearing has limited tax benefit in NZ compared to countries without ring-fencing.

A common assumption is 2–4 weeks per year, which equates to a 4–8% vacancy rate. This covers tenant turnover, time to re-advertise and vet new tenants, and minor repairs between tenancies. In tight rental markets like Auckland or Wellington, 2 weeks may be realistic with professional management. In softer regional markets or if self-managing, 3–4 weeks is more conservative. The calculator lets you adjust this to model different scenarios.

Cash-on-cash return measures your annual after-tax cashflow as a percentage of the cash you initially invested (your deposit). For example, a $140,000 deposit generating $5,000/year in after-tax cashflow is a 3.57% cash-on-cash return. This lets you compare the income yield of the property against alternatives like term deposits (~4–5%), shares, or another property. It ignores capital growth, which is the other half of the total return equation.

Positive gearing means your rental income exceeds all holding costs (mortgage interest, rates, insurance, management, repairs, and tax), producing an annual profit. Negative gearing means the costs exceed the income, producing a loss. Historically, negative gearing was attractive in NZ because rental losses could offset salary income, reducing your total tax bill. Ring-fencing rules (since 2019-20) have largely removed this benefit for residential property — losses now carry forward to offset future rental profits only. The 'gearing' term refers to using borrowed money (mortgage debt) to fund the investment.