Rental property spreadsheet
Most rental property maths gets done on the back of an envelope: rent, minus the mortgage, looks alright. Then the rates bill arrives, the tenant leaves for six weeks, and the tax return doesn't do what you expected.
This calculator does the full version — yield, cashflow, tax and total return over the years you'd actually hold it — before you commit.
Enter your details in the purple cells. It's yours to keep and change.
Yield, cashflow and return are three different things
They get used interchangeably and they answer different questions.
Gross yield is annual rent divided by purchase price. It's the number quoted in listings and it's close to useless on its own, because it ignores every cost of owning the place.
Net yield takes out rates, insurance, maintenance, management fees and vacancy. That's a real number, and it's usually a lot lower than people expect.
Cashflow is what actually lands in or leaves your account each month once the mortgage is paid. Plenty of rentals with a respectable yield are cashflow negative, meaning you're topping them up from your salary every month.
Total return adds capital growth, which is where most of the money in New Zealand property has historically come from — and it's also the part nobody can promise you.
A property can look good on one of these and poor on another. The reason to run all four is to know which one you're relying on.
The tax rules changed, twice
If you're working from a spreadsheet or an article written a couple of years ago, two things in it are now wrong.
Interest is fully deductible again. From 1 April 2025, 100% of the interest on money borrowed for a residential rental is deductible under the ordinary rules. During the 2024–25 year it was 80%, and before that it had been phased down as low as zero for many properties. Any calculation still assuming interest isn't deductible will understate your return significantly, since interest is usually the largest expense.
The bright-line test is two years. For property sold on or after 1 July 2024, the period is two years rather than the five or ten years that applied before. Sell inside two years and any gain may be taxable; outside it, the bright-line test generally doesn't apply — though other land rules can still catch you, particularly if you bought with an intention to resell.
The rule that catches people out
Interest deductibility came back. Ring-fencing didn't go away.
If your residential rental activity runs at a tax loss overall, you generally can't use that loss to reduce the tax on your salary. It carries forward, to be used against future rental income or certain taxable property gains instead.
Note that this works across your whole residential portfolio by default, not property by property. If you already own a rental that's making money, a loss on a new one can be offset against it in the same year. You can elect to apply the rules property by property instead, but it's rarely the better choice. It means a loss on one property can't touch income from another, and each one has to wait for its own future profit.
The calculator now does this properly. Earlier versions assumed any tax benefit landed in the year the loss was incurred, which flattered the early years, exactly when a geared rental is hardest to hold. It no longer does. Losses are tracked year by year, carried forward, and released only against future taxable rental profit.
You can see it working on the 50 year summary. On the default figures the property runs at a loss for five years, banking about $17,700 of carried-forward deductions and receiving no tax relief at all in the meantime. From year six it turns profitable, and those banked losses shelter the profit until they're used up around year ten. Only then does tax start being paid.
The practical difference is in the early years, and it's the difference between a number and a bank balance. If you're relying on an annual tax refund to help fund the top-up on a loss-making rental, that refund isn't coming. Over a long hold it barely moves the total return, because the deductions get used eventually. Over the first few years, the years that decide whether you can actually afford to hold the thing, it matters a great deal.
Where ring-fencing gets complicated
The basic rule is simple enough. Losses wait until there's rental profit to use them against. The edges are where it gets expensive, and where the calculator stops being able to help you.
Selling doesn't automatically free up your losses. This is the one that surprises people. If you sell and the sale isn't taxable, any unused ring-fenced losses stay ring-fenced. They're only released against your other income if the sale itself was taxed, under the bright-line test, or because you bought with an intention to resell, or one of the other land rules. Losses come off the taxable gain first, and only what's left over can reach your salary.
That's deliberate rather than an oversight in the rules. Ring-fencing exists because the gain on residential property usually isn't taxed. Where the gain is taxed, there's no longer a reason to fence the deductions. The two go together.
So the sequence most investors expect: hold it long enough to escape the bright-line test, sell tax-free, claim the accumulated losses - doesn't work. Escaping the bright-line test is exactly what stops the losses being released.
The losses stay with you, not with the property. If you sell one rental and buy another, the carried-forward balance comes with you and can be used against the new property's income. Same if you're out of the market for a few years and then buy again. They're only genuinely dead if you leave residential property for good without a taxable sale, and for a property that never turned a profit, that's a real risk rather than a hypothetical one.
Portfolio or property by property. The default treats all your residential rentals as one pool, which is usually what you want, because a loss on one can be offset against profit on another in the same year. Electing property-by-property is occasionally useful, but it changes what happens on exit as well as year to year, and it isn't a decision to make casually.
Structures add another layer. Held in a company, unused rental losses are subject to the shareholder continuity rules on top of ring-fencing. Change enough of the ownership and they can be lost entirely. Trusts, partnerships and look-through companies each have their own treatment.
Which is why this is an accountant conversation, not a spreadsheet one. The calculator models the straightforward case: one property, held personally, losses carried forward and used against its own future profit. That's the right answer for most first-time investors and it's genuinely useful for deciding whether to buy. But the moment you own more than one, hold it through an entity, or start thinking about when to sell, the carried-forward balance needs tracking properly in your tax return every year, and it's much easier to get right as you go than to reconstruct later.
If your accountant isn't already showing you the ring-fenced balance each year, ask.
What people leave out of the numbers
Running through what tends to be missing when someone brings me their own workings:
Vacancy. Even a good property sits empty between tenants. Budgeting for 52 weeks of rent is optimistic.
Maintenance. Not just when something breaks — roofs, hot water cylinders and repainting are certainties on a long enough timeline, they just aren't annual. You probably want to use a minimum of 1% of the property value for maintenance assumptions.
Healthy Homes compliance, and what it costs to bring an older property up to standard.
Management fees, if you're not doing it yourself. And if you are, that's your time — which isn't free just because it isn't invoiced.
Insurance and rates, both of which have risen faster than general inflation.
The costs of buying and selling — legal, building report, agent commission on the way out.
It also has to beat the alternative
The question isn't only "does this rental make money". It's "does it make more than the same money would somewhere else".
Your deposit could sit in an index fund with no tenants, no maintenance and no 2am phone calls. Property has genuine advantages — leverage most of all, since the bank will lend you money to buy a house and won't lend it to buy shares — but comparing them properly needs both sides costed on the same basis, after tax and fees.
Should I buy an investment property or invest calculator can be found here.
And the bank has to say yes
Two constraints sit alongside the maths.
Investors generally need a larger deposit than owner-occupiers. And the Reserve Bank's debt-to-income limits apply — investors are allowed a DTI of 7 rather than the 6 that applies to owner-occupiers, but existing mortgages count towards that total, so an investment property is often what pushes someone over the line.
Debt to income calculators can be found here.
What the calculator covers
What you put in
Purchase price, mortgage, interest rate and loan term, plus closing costs. There's a full interest-only option — set the period, then choose whether you'd refinance to principal and interest for the years remaining or repay the loan outright at the end.
Then the running costs, itemised rather than lumped together: rates, insurance, listing fees, property management, repairs and maintenance, anything else, and depreciation on furnishings and appliances. Rental income is entered alongside expected vacancy in weeks per year, because assuming 52 weeks of rent is the most common way these numbers get flattered.
Finally your growth assumptions — property value, rent and expense inflation each set separately — your tax bracket, sales commission, and how long you'd hold it.
What you get back
A year on year summary for up to 50 years, including your cashflow, operating income, tax benefit/loss, annual property appreciation, and sale proceeds if you sold in any particular year.
Mortgage interest is calculated on a monthly schedule, the way a bank actually amortises a loan, rather than annually.
What it can't tell you
Every projection depends on assumptions nobody can verify in advance — capital growth, rent increases, interest rates, how long you'll hold it. Change any one and the answer moves.
That's not a reason to skip the exercise. It's a reason to run it more than once, with pessimistic numbers as well as optimistic ones, and to know which assumption your decision actually rests on. If the whole case depends on 5% annual capital growth, that is worth knowing before you sign.
Thinking about a rental?
If you'd like a second opinion on the numbers — or on whether property is the right place for your money given everything else in your plan — get in touch for a free 30 minute chat. Independent, commission-free, and I don't sell property.
For more information on rental properties check out the housing blog