Commercial Investment Opportunity Calculator
Evaluate acquisition costs, debt structuring, and net yields to determine if a property is cash-flow positive.
1Acquisition & Purchase
2Finance & Debt Structuring
* Input a Purchase Price above to unlock deposit presets
* Reduces interest charged on loan
P & I (Principal & Interest): Repayments cover interest plus paying off the actual debt balance, building equity over time.
Interest Only (IO): Monthly payments only cover the interest charged. Keeps initial outgoings lower to maximize cash flow.
3Operations & Yield
* Net Leases usually = 100% recovery
Negative Gearing
Required for positive gearing
Max rate for positive cash flow
Equity Requirement
* Total cash (deposit + costs) for $0 cash flow
* Benchmarks include Stamp Duty & Due Diligence
Commercial property often provides higher yields but carries higher vacancy risk and management intensity compared to residential.
Understanding Commercial Cash Flow
Unlike residential property where you usually pay the outgoings, commercial properties (specifically those on Net Leases) allow you to recover 100% of the operating expenses from the tenant.
Net Yield vs. Gross Yield: Net yield is the true reflection of your return as it factors in the acquisition costs (Stamp Duty, Legals) and the actual net income after non-recoverable expenses.
The "Hidden" Costs: Vacancy is the primary risk in commercial real estate. A 5% vacancy allowance in your model helps build a "war chest" for those periods between tenants.
Capital Growth + Income
Commercial property is valued based on its Cap Rate (Yield). As you increase rent or decrease expenses, the building's value increases instantly.
Prime Australian industrial yields currently sitting around 5-6.5%.