Positive Cashflow

A positive cashflow property is one where rental income exceeds all expenses including mortgage interest, producing surplus income for the owner. It's the opposite of negative gearing, and it's a deliberately different strategy: rather than betting on capital growth to recover ongoing losses, the investor is choosing a property that pays for itself from day one.

In Australia in 2026, with mortgage rates above 6%, positive cashflow typically requires gross yields around 5.5-6.5% or higher. That's rare in capital cities; most positive-cashflow properties are found in regional centres, outer metro suburbs, and specific sectors (commercial, student accommodation, shared housing).

Positive cashflow properties tend to have lower capital growth than their capital-city equivalents, so total return over long holding periods can be lower. The compensation is that they require no income subsidy from the investor, which means they can be accumulated without limit. Investors building portfolios often use a mix, with positive cashflow sustaining the holding costs of growth-oriented properties.

The maths is specific to each investor: negative gearing benefits depend on marginal tax rate, and cashflow analysis must include interest rate, deposit size, and all expenses, not just rent and price.