Investment property ROI —
drag the sliders, watch the outcome

Here is the scenario as you've set it: you buy this property for $750K and rent it out from day one. You hold for 10 years and assume 5.0% capital growth and 3.0% rent growth per year.

On day one, you need $195,500 in cash — that's your 20% deposit ($150K), $40K of VIC stamp duty, $5K in conveyancing and bank costs. The bank lends you $600K, which costs $3,792 a month at 6.50% over 30 years.

Year 1 rental income is $32K ($618/week × 52). After mortgage and holding costs, that's a negative cashflow of $-25,898. You're out of pocket about $25,898 a year — this is a growth play, not a yield play. The negative gearing offset against your salary recovers roughly 30-45% of that depending on your marginal rate.

Run it forward 10 years and the property is worth $1.22M. Your loan balance has paid down to $512K, so your equity is $710K. Cumulative cashflow over the hold is $-228,875. Together with the equity, your $195,500 of cash grew to $480,630 — an annualised return on cash of 9.4%.

That's a respectable result — comfortably ahead of ASX 200 long-run real returns. Most of the gain comes from leverage and capital growth, not yield.

The 60 sqm granny flat strategy (where the lot allows it) typically adds 3-5 percentage points to the annualised return, because the build cost is recovered in ~8-9 years through the extra rent and the resale value picks up most of the build cost as equity. Toggle the "+ Granny flat" strategy to see the side-by-side — and our due-diligence report checks whether one actually fits a specific lot.