Interest rates have reset what "good cash flow" looks like, and most investors are still running the same playbook they used in 2019. The frustrating part? There are three levers sitting right in front of you that can lift net yield by 1-3% without buying another property or taking on more debt risk.
Let's break them down.
Lever 1: Depreciation (the paper deduction you're probably underclaiming)
Depreciation is the tax deduction you get for the wear and tear on your building and its fixtures. You don't spend a cent to claim it, yet most investors either skip the quantity surveyor's report or got one years ago and never updated it.
What it looks like in real numbers
A new 4-bedroom investment property in SEQ purchased for $750,000 typically generates:
- Year 1 depreciation: $14,000 to $18,000
- Tax saving (37% marginal rate): ~$5,500 to $6,600
- Weekly cash flow uplift: $105 to $125
On a property renting at $650/week, that's the difference between bleeding $80/week and being cash flow positive.
Where investors leave money on the table
- Buying established stock without checking the depreciation schedule before settlement
- Not getting a quantity surveyor's report (it's tax deductible itself and pays for itself many times over)
- Forgetting to vary their PAYG withholding so the cash sits in their pocket weekly instead of waiting for tax time
Lever 2: Dual occupancy and dual-key duplex builds
This is the lever with the biggest yield uplift, and it's still under-used because most investors default to a standard 4-bed house.
A dual-key duplex (one title, two separately rentable dwellings) or a duplex on two titles can shift the maths significantly.
Standard house vs duplex: same land, very different yield
Standard 4-bed house in a growth corridor:
- Build + land: ~$780,000
- Weekly rent: $650
- Gross yield: ~4.3%
Duplex on the same style of block:
- Build + land: ~$1,200,000
- Combined weekly rent: $1,150 to $1,250
- Gross yield: ~ 4.98%to 5.42%
That 2% gross yield uplift is the difference between negative gearing for a decade and being self-funding inside 24 months. You also get two tenants, which reduces vacancy risk: if one side turns over, the other is still paying.
If you want to see what's currently being delivered in this space, have a look at our duplex investment pathway or browse current opportunities.
Lever 3: Rentvesting (the lifestyle play that improves your portfolio)
Rentvesting (renting where you want to live, investing where the numbers work) is usually framed as a first-home-buyer strategy. For existing investors, it's actually a portfolio repair tool.
The scenario we see constantly
Client owns their PPOR in inner Melbourne worth $1.4M with $600k debt. They want to keep investing but every property they buy in their own city is cash flow negative by $200+/week.
The rentvesting variant:
- Sell or rent out the PPOR
- Rent a similar lifestyle property (often cheaper than the mortgage + rates + insurance)
- Redeploy equity into 2-3 higher-yielding regional or interstate properties
Approximate impact
- Cash flow swing of $400 to $800/week positive
- Debt becomes fully tax deductible (instead of mostly non-deductible PPOR debt)
- Portfolio of 3 properties instead of 1, so capital growth compounds across a wider base
The trade-off is psychological more than financial: you have to be okay not owning the roof over your head. For investors in their 30s and 40s focused on building a portfolio, it often makes sense.
How to stack all three
The investors getting the best results aren't picking one lever. They're stacking them:
- A new-build duplex (lever 2) maximises depreciation (lever 1) because new stock has the largest deductible base
- Rentvesting (lever 3) frees up equity to fund that duplex without overextending
- The combined effect can shift a portfolio from negative $300/week to positive $400/week within one financial year
What to do next
If you've got existing investment properties and the cash flow is hurting, the answer usually isn't to sell. It's to audit which of these three levers you haven't pulled.
A 30-minute strategy session will tell you which lever gives you the biggest uplift for the least disruption. Book a call with Nick and bring your current portfolio numbers. We'll model the impact before you change anything.