Gearing calculator
Is your property positively or negatively geared?
Enter what the property earns and what it costs to hold, and see instantly whether it puts cash in your pocket each year or draws cash out of it.
Your numbers
Annual cash position
−A$2,700
−A$225 per month
Negatively geared
Holding costs are greater than the rental income, so you top up the shortfall from your own pocket — typically in the expectation of longer-term capital growth.
How we got there
- Rental income
- A$33,800
- Less loan interest
- − A$30,000
- Less other running costs
- − A$6,500
- Net cash position
- −A$2,700
Gearing here is a cashflow measure — income versus the cost of holding the property. It excludes principal repayments and any capital growth. Figures update as you type.
What does gearing actually mean?
Gearing describes the relationship between what a property earns in rent and what it costs to hold. It comes down to one question: does the property make money or cost money to own each year?
The formula
Rental income − holding costs = cash position
Add up the rent you collect over a year, then subtract the cost of holding the property — loan interest plus running costs like rates, insurance, management and repairs. If what's left is positive, the property is positively geared. If it's negative, it's negatively geared.
Positive vs negative
Surplus → positive · Shortfall → negative
A positively geared property earns more than it costs, so it generates surplus cash each year. A negatively geared property costs more than it earns, so you top up the difference from your own income — usually in the expectation that capital growth will more than make up for it over time.
Rent exceeds holding costs. The property pays for itself and hands you a surplus each year, before any growth in value.
Rent and holding costs are about equal. The property covers itself — it neither adds to nor drains your cashflow.
Holding costs exceed the rent. You contribute the shortfall from your own pocket to keep holding the property.
A worked example
Say a property rents for $650 a week — about $33,800 a year. The loan costs $30,000 in interest a year, and running costs (rates, insurance, management and repairs) add another $6,500. Holding costs total $36,500, so the cash position is −$2,700 a year — the property is negatively geared, costing about $225 a month to hold. Lift the rent to $800 a week, or pay the loan down so interest falls, and the same property can flip to positively geared.
Why investors track gearing
- It tells you whether a property funds itself or needs topping up from your own income.
- Negative gearing needs enough spare cashflow elsewhere to sustain the shortfall.
- As rents rise or the loan shrinks, a property can move from negative to positive over time.
- Across a portfolio, some properties may be positive and others negative — the mix drives your overall cashflow.
Akweno works out gearing and net cashflow for every property automatically as you record rent, loan interest and expenses — so you can see at a glance which properties carry themselves and which ones you're funding. Start free.