Property investment jargons explained

Getting your head around the ins and outs of property investment isn’t easy, especially with all those head-scratching terms you hear in the business. But never fear! Here’s a list in “plain English” list to help you find your way around all these jargons.

Cash flow

A positive cash flow is one in which the rent you receive from your tenant is more than the property’s ongoing expenses such as mortgage repayments, maintenance, insurance, council rates and more. Property investors use different ways and means to calculate cash flow, often based on their particular goals. But either way, aim to buy a property which generates a positive, not negative, cash flow. 

Capital Gains and Capital Gains Tax (CGT)

This is the difference between what you paid for the property and how much it’s now worth. A property bought for $500,000 and now worth $700,000 denotes a capital gain of $200,000. Bear in mind however, that if you make such a profit on your investment property when selling it, you will need to pay capital gains tax (CGT) on this amount as part of your income tax return. 

Negative and positive gearing

A controversial term, negative gearing occurs when a property investment doesn’t make enough money to cover loan repayments, even after you’ve claimed all possible tax deductions. On the plus side however, negative gearing can result in property investors’ tax bills plunging significantly – in the short term at least. Sound confusing? It can be. 

Investors stuck in a negative gearing situation can deduct such losses from their taxable income, thereby reducing this income and paying less tax overall. They may then sell their property at a high price with this profit covering the costs of their earlier losses. 

On the other side of the coin, positive gearing indicates that the income you enjoy from your investment is more than its expense needs. Therefore, no deductions from your taxable income can be made and all that great income will be taxed.

Rental yield 

High is great when it comes to your rental yield. A high yield essentially means you’ve made an enviable profit on your property investment with the yield measured as a percentage of the home’s overall value. A gross rental yield is the full amount of annual rent you receive plus the property’s value while a net yield is this same amount minus all your property expenses. 

Vacancy rates

Low vacancy rates equal virtual victory for property investors. It means there are very few rentals up for grabs in the marketplace, leaving potential tenants scrambling to find a great home, instead of being jaded by the overflow. It also indicates how popular a particular area or suburb may be.

If you’re unsure about any of these terms or how investing can work for you, make sure you seek the professional advice of your accountant, tax advisor or real estate professional. 


Managing Director – New Vision Financial Services & New Vision Real Estate After years in the banking, finance & commercial sector Chris noticed that the industry needed a company with a personal touch that offered their customers a complete solution. In 2015 New Vision Financial Services was created to allow our consultants to use their experience (including approving and structuring large complex commercial transactions through to basic home loans) and to concentrate on offering a personalised service to their clients. With the growth and success of New Vision Financial Services a decision was made in 2019 to launch New Vision Real Estate to provide an end to end solution for client weather they be first home buyers or seasoned investors. Chris has built a team at New Vision Financial Services and New Vision Real Estate that have access to over 70 different lenders, insurers, lawyers, accountants and financial planners giving you more flexibility when making a decision. We offer a full service Real Estate agency offering Sales, Leasing, New Developments, House & Land and Commercial. Call me anytime on 0433 181 544 or email The team at New Vision Financial Services have access to over 70 different lenders, giving you more flexibility when making a decision. Our consultants have had extensive experience within the banking, financial and corporate sector. At New Vision Financial Services we specialise in finance lending for home, investment, business, commercial, asset, debtor and many other requirements. As New Vision Financial Services has progressed, we have developed strong relationships with professional service providers such as; Financial Planners, Accountants, Settlement Agents, Leasing & Equipment Providers, Debt Management Specialists and any more to allow our clients access to a complete suite of services.