This calculator finds the weekly rent at which your New Zealand rental property breaks even on cash flow, the threshold that separates a negatively geared property you top up from your own pocket from one that pays its own way. Many investors know roughly what their rental brings in but have never worked out the rent it would actually need to cover every cost, so they carry a cash shortfall year after year on the assumption that capital growth will make up for it. This tool makes the threshold explicit. You enter the current weekly rent and the property's annual costs: mortgage interest, council rates, insurance, maintenance and the property management fee as a percentage of rent. The calculator works out the annual rent and annual costs, shows whether the property currently runs at a surplus or a shortfall and by how much, and most importantly calculates the break-even weekly rent at which rent exactly covers costs. Below that figure the property is negatively geared; above it, it is cash-flow positive. Use it to set rent reviews, to test a purchase before you buy, or to see how a change in interest rates moves the threshold. This looks at cash flow only, not tax, and is an estimate, not financial advice.
Break-even rent allows for the management fee being a share of rent. Cash flow only, not tax; check interest and ring-fencing rules separately. Estimate only.
Annual rent is the weekly rent times 52. The management fee is that percentage of annual rent, added to interest, rates, insurance and maintenance for total annual costs. The cash position is annual rent minus annual costs. The break-even rent solves for the weekly rent where rent covers all costs, allowing for the fact that the management fee rises with rent, so it is the fixed costs divided by 52 times one minus the management percentage.
At 600 dollars a week the rental brings in 31,200 dollars. Interest 28,000, rates 3,000, insurance 2,000, maintenance 2,500 and an 8 percent management fee of about 2,496 total roughly 37,996 dollars, a shortfall of about 6,796 dollars. Rent would need to be about 742 dollars a week to break even.
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