GetPost Labs is a technology company. We work with property data: the data you supply (loans, rent, costs, documents) and the data we research (sales, rents, rates and rules), and we apply our experience in building data and software systems to lay it out clearly. The outcome is structured information to help you answer your own questions with data. It is not financial, tax, legal, credit or valuation advice, and it is not a recommendation to buy, hold or sell.
The property, address and owners in this example are fictional, and the figures are rounded 2026 assumptions. Real outcomes depend on your circumstances and the market, so check decisions with a licensed financial adviser, accountant or registered valuer.
The story
An investor has found a block of six units near a university, listed at $4,600,000. The units are let room by room to students for about $25,000 a month in total. The investor has equity and cash to put in, and asked two questions: does the rent cover the costs and the loan, and how much should I borrow?
The block earns 4.5% after running costs, less than the 6.5% a loan costs. At the usual maximum loan of 70% it clears only $10,500 in the first year. With half borrowed or bought with cash it pays its way from day one, and most of the long-term gain depends on growth.
The property
| Property | Six-unit block, 7 Wattle Terrace, inner Brisbane (fictional) fictional |
| What it is | Six 2-bedroom units on 810 m², let room by room to university students |
| Price | $4,600,000 |
| Stamp duty (Queensland) and legals | $257,025 |
| All-in cost | $4,857,025 |
| Rent | $25,000 a month, assumed to rise 4% a year |
Rent ÷ price
After running costs, on the all-in cost
Interest-only, assumed
What the cash could earn instead
Running costs
| Land tax | $17,500 |
| Council rates | $12,000 |
| Water | $10,400 |
| Electricity and Wi-Fi (common areas) | $2,800 |
| Property management | $26,000 |
| Maintenance and repairs | $6,000 |
| Insurance | $5,500 |
| Total a year | $80,200 |
| Rent less running costs | $219,800 |
The net yield of 4.5% is below the 6.5% loan rate. Every dollar borrowed costs more than the block earns on it, so the more that is borrowed, the worse the cash flow.
Three ways to buy it
| 70% borrowed | Half borrowed | All cash | |
|---|---|---|---|
| Cash put in | $1,637,025 | $2,557,025 | $4,857,025 |
| Cash flow in year 1 (before tax) | $10,500 | $70,300 | $219,800 |
| Cash flow turns positive | From year 1 | From year 1 | From year 1 |
| Return on cash in year 1 | 0.6% | 2.7% | 4.5% |
| Cash flow over 10 years | $589,429 | $1,187,429 | $2,682,429 |
| Gain after 10 years at 5% growth (before tax) | $3,075,461 | $3,673,461 | $5,168,461 |
| At 2% growth instead | $1,227,631 | $1,825,631 | $3,320,631 |
| Same cash in a term deposit | $905,225 | $1,413,957 | $2,685,786 |
Running costs rise 3% a year and rent 4%. Gain = sale value after 2% selling costs, less the loan, plus 10 years of cash flow, less the cash put in, before income tax and capital gains tax. A block of six units is usually financed as commercial lending, where banks typically lend up to about 60–70% of the price.
70% borrowed, year by year
At the usual maximum loan, the block only just pays its way at first: $10,500 is left in year one after costs and interest. A rate rise of about 0.3% would wipe that out. The margin grows as rents rise.
| Year | Rent | Running costs | Interest | Cash flow | Running total |
|---|---|---|---|---|---|
| 1 | $300,000 | $80,200 | $209,300 | $10,500 | $10,500 |
| 2 | $312,000 | $82,606 | $209,300 | $20,094 | $30,594 |
| 3 | $324,480 | $85,084 | $209,300 | $30,096 | $60,690 |
| 4 | $337,459 | $87,637 | $209,300 | $40,522 | $101,212 |
| 5 | $350,958 | $90,266 | $209,300 | $51,392 | $152,604 |
| 6 | $364,996 | $92,974 | $209,300 | $62,722 | $215,326 |
| 7 | $379,596 | $95,763 | $209,300 | $74,533 | $289,859 |
| 8 | $394,780 | $98,636 | $209,300 | $86,844 | $376,703 |
| 9 | $410,571 | $101,595 | $209,300 | $99,676 | $476,378 |
| 10 | $426,994 | $104,643 | $209,300 | $113,051 | $589,429 |
What this shows
- Borrowing costs 6.5% while the block earns 4.5% net, so every extra dollar borrowed lowers the cash return
- At 70% borrowed, year one clears only $10,500; a small rate rise or a vacant unit turns it negative
- With half borrowed, rent covers the interest comfortably from day one
- Bought with cash, it earns about 4.5% before growth, roughly level with a term deposit
- Most of the ten-year gain comes from growth: compare the 5% and 2% rows
- Check student demand, vacancy between semesters, zoning and building condition before relying on the rent
Everything on this page is for educational and informational purposes only. Costs, prices, interest rates, rules and government schemes change over time, and the figures shown are approximate examples that may already be out of date. Nothing here is financial, tax, legal, building or professional advice, a recommendation or a quote. Do your own research, get written quotes and seek advice from qualified professionals before making any decision.
PropertyMaths is being built by GetPost Labs Pty Ltd, a technology company. We are not financial, tax, legal or property advisers. The information here is our own research, shared to show what a product for property owners and investors could do.