Essential terms and concepts every Australian property investor should understand. From negative gearing to capital growth, learn the language of property investment.
Negative gearing occurs when the costs of owning an investment property — including loan interest, maintenance, and management fees — exceed the rental incom...
Positive gearing means the rental income from an investment property exceeds all associated expenses, including mortgage repayments, management fees, insuran...
Rental yield is the annual rental income generated by a property expressed as a percentage of its purchase price or current market value. Gross rental yield ...
Capital Gains Tax (CGT) is the tax levied on the profit made when selling an asset, including investment property. In Australia, the capital gain is added to...
Stamp duty (also known as transfer duty) is a state or territory government tax paid by the buyer when purchasing property. The amount varies by state and is...
Depreciation is a non-cash tax deduction that allows property investors to claim the wear and tear of a building's structure (Division 43) and its fixtures a...
The vacancy rate represents the percentage of rental properties in a given area that are unoccupied at any point in time. It is typically expressed as a perc...
Cash flow in property investment refers to the net amount of money moving in and out of your investment each period (usually weekly or monthly). Positive cas...
Lenders Mortgage Insurance (LMI) is a one-off insurance premium that protects the lender (not the borrower) if the borrower defaults on their home loan. LMI ...
Body corporate (also known as owners corporation or strata fees) are regular levies paid by owners of units, apartments, and townhouses to cover the maintena...
Capital growth (or capital appreciation) is the increase in the market value of a property over time. It is typically measured as an annual percentage change...
The Loan-to-Value Ratio (LVR) is the proportion of the property's value that is funded by a loan, expressed as a percentage. For example, if you borrow $400,...
The property cycle describes the recurring pattern of growth, peak, decline, and recovery in property markets. A typical Australian property cycle runs appro...
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